March 8, 2021

Another Sharp Swing, This Time Up, for U.S. Markets

“It’s just a yo-yo,” said Myles Zyblock, the chief institutional strategist and managing director for Capital Markets Research at RBC Capital Markets. “I think the primary structure is still in place, and that is a structure of concern.”

Even as new economic data was released on Thursday, showing, for example, that weekly jobless claims were lower at 395,000, there was hesitation to read too much into one scrap of information embedded in the bigger economic picture.

Some corporate results bolstered the broader market as well, such as those of Cisco Systems, which helped raise the technology sector more than 3 percent as its share rose more than 15 percent around noon.

But the financial markets this week have been held hostage to concerns about the global economy, financial troubles in Europe and the implications of a ratings agency’s unprecedented downgrade of the United States’s credit rating. Benchmark United States bond yields have hit lows and stocks have ricocheted between steep gains and losses to an extent that has not been seen since March 2009.

They finished sharply lower on Wednesday, but on Thursday the Standard Poor’s 500-stock index and the Dow Jones industrial average were up nearly 3 percent, and the Nasdaq composite topped that mark.

“People are trying to bottom pick today, and it might be the bottom,” said Mr. Zyblock.

“I would like to see the collective message start to stabilize to give me confidence there is a hardened floor underneath this market,” he said.

Financial stocks also rose more than 3 percent.

Investors have been burned by the market volatility in the past few days, and many are bracing for any possible outcome.

“We have seen it go back and forth between risk-on and risk-off very quickly,” said Paul G. Christopher, chief international investment strategist for Wells Fargo Advisors.

Speaking about the early rise in stocks, he said: “It has been risk-off, but we might be getting near the end of that. You can only run emotionally for so long.”

The announcement that the leaders of Germany and France would meet on Thursday might be helping stocks to firm, Mr. Christopher said.

“The markets need to have reassurance from governments that they are going to take care of their budget deficits and going to backstop their banks,” he said.

The yield on the United States 10-year Treasury was at 2.23 percent around noon compared with 2.1 percent on Wednesday.

European indexes had been mixed but rallied after the market opened in the United States.

The FTSE 100 was up 3.22 percent. The CAC 40 in Paris was up 2.89 percent and the Dax in Germany was up 3.42 percent. Earlier in the day, Société Générale shares jumped nearly 8 percent after earlier declines. On Tuesday the stock gave up almost 15 percent of its value amid worries about the debt and economic woes of Europe and the United States.

Frédéric Oudéa, the bank’s chief executive, told Le Figaro in an interview published Thursday that the bank had “suffered a series of attacks in the market,” on the basis of rumors about its financial condition that he denied “most vigorously.”

A report on Thursday from Reuters, which did not identify its sources, ratcheted up fears after it said at least one bank in Asia had cuts its credit lines to the major French banks and that others were reviewing their lines because of perceived risks. If confirmed, that would represent a worrying escalation of the crisis, since interbank lending is the lifeblood of the global financial system.

Société Générale called Thursday on French market regulators to “investigate the origin of these rumors that have gravely impacted the interest of its shareholders.”

Christian Noyer, the governor of the Bank of France and a member of the European Central Bank’s governing council, addressed the market concerns in a statement, saying the first-half results of French banks had “confirmed their solidity in a difficult economic environment, thanks to rigorous risk management and a universal banking model based on diversified businesses.”

The banks’ capital levels are adequate, Mr. Noyer said, noting that they had recently passed stress tests.

In Asia, the Hang Seng index in Hong Kong fell almost 1 percent, while the Nikkei 225 in Japan closed down 0.6 percent.

Gold futures briefly topped $1,817.60 an ounce, its highest ever in nominal terms, before receding to about $1,794.20. Adjusted for inflation, the record gold price would be closer to $2,400 an ounce, according to Capital Economics.

Crude oil futures in the United States were down 1 percent at $82.07 a barrel.

The euro rose to $1.4137 from $1.4178 late Tuesday in New York, while the British pound rose to $1.6140 from $1.6134.

German 10-year bunds were trading at 2.18 percent, down 1 basis point, while bonds of Italy were down 6 basis points to 5.01 percent and Spain was down 5 basis points at 4.93 percent.

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