August 19, 2022

Stocks Move Higher, but Concerns Remain

By late morning, the Dow Jones industrial average was up 61.38 points, or 0.51 percent, at 12,151.34. The S. P. 500 added 7.83 points, or 0.61 percent, at 1,294.00, and the Nasdaq composite index put on 14.88 points, or 0.55 percent, at 2,717.44.

Helping to put a floor on commodity prices, the dollar fell to a one-month low against a basket of currencies after a Chinese official predicted that it would continue to weaken versus other major currencies.

The S. P. 500 has fallen 5.5 percent since a recent high at the start of May, and on Monday closed at its lowest level since March 18, having fallen through its April low in the last session. Some investors look for further volatility and a possible move lower before equities stabilize.

“We came a long way yesterday,” said John Brady, senior vice president at MF Global in Chicago. “I think that there is going to be a growing nervousness in the market.”

“Certainly yesterday’s close indicated that from a technical standpoint this market is going to work its way lower before we stabilize,” said Peter Cardillo, chief market economist at Avalon Partners in New York.

Mr. Cardillo expects the S. P. 500 to hold at 1,275 but cautioned that a move below that could trigger more selling. Analysts at Brown Brothers Harriman in New York look for a decline to 1,230.

“I think the market is trying to focus on whether or not this is a temporary decline in economic activity, or is this going to mushroom into something worse,” said Mr. Cardillo, referring to the recent batch of weak economic data.

European stocks edged higher, rebounding from an 11-week closing low and after a four-session losing run.

Helping the rebound, the European Central Bank chief, Jean-Claude Trichet, said a restructuring of Greece’s public debt, which many in the market see as inevitable, is inappropriate as long as the government follows through on reforms.

Brent crude fell 0.3 percent but traded above $114.19 a barrel, while gold and copper futures in the United States climbed. Gold was benefitting from the soft dollar and safe-haven investors.

The Federal Reserve chairman, Ben Bernanke, was due to speak on the economic outlook Tuesday afternoon at a bankers conference in Atlanta.

Article source: http://feeds.nytimes.com/click.phdo?i=26c550697353001c1425221e5b48ab93

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