U.S. Stocks Rebound After Weeks of Selloff

Barry Adams
23 May, 2022
New York City

Stocks on Wall Street opened higher after another week of relentless decline and seven weeks of losses that brought down two key indexes in or near bear zone. 

The S&P 500 index advanced 0.6% to 3,925,84 and the Nasdaq Composite rose 0.13% to 11,356.05. 

Stocks have been in a free fall for the last two months and S&P 500 and the Nasdaq indexes have fallen for the seven week in a row. 

The S&P 500 index has declined for the seven weeks in a row and is down about 18% and the Nasdaq Composite index has fallen 28% in the year so far.  

The profit recession has finally hit the valuations and investors have been rerating future cash flows and lowering price-earnings ratios of tech, transportation, banking, and retail sector stocks. 

Investors will scrutinize the earnings from Nordstrom, Costco, Zoom Video, and Dollar General during the week. 

Electronic Arts traded higher 3% to $134.85 after media reports suggested the video game publisher is looking for a merger partner. 

VMware, Inc soared 20% after the cloud infrastructure company is in advanced talks to be acquired by the chip maker Broadcom according to news reports from Bloomberg News and Reuters. 

Broadcom declined 4%. 

Starbucks also confirmed it will exit from Russia after 15 years of presence and close down all 130 licensed cafes. 

In European trading, market indexes gained after cautious buyers stepped up buying. 

The DAX index gained 0.73% to 14,083.83, the CAC-40 index rose 0.2% to 6,297.67, and the FTSE 100 index advanced 1.2% to 7,479.18. 

Merger and acquisition news dominated the market sentiment. 

Siemens AG gained after Siemens Energy made a cash tender offer to acquire all outstanding shares in Siemens Gamesa Renewable Energy. 

Deutsche EuroShop AG jumped 40% to 21.90 euros after the shopping center operator received an offer from a consortium of investors for 1.4 billion euros. 

Holcim Group jumped 0.9% to 46.98 Swiss francs after the company agreed to acquire Louisiana-based Cajun Ready-Mix Concrete. 

The construction company has been selling off its cement business around the world including in India and shifting its business mix to more value added products. 

In Asian markets stocks were subdued after China reported rising infection cases in Beijing over the weekend. 

Shanghai Composite index lost early gains to close nearly unchanged at 3,146.86 and the Hang Seng index declined 1.2% to 20,470.86. 

Stocks in Mumbai were also under pressure after the Reserve Bank of India is set to lift rates again at the next policy meeting scheduled on June 6. 

The Sensex and the Nifty indexes lost early momentum after the comment from the RBI governor and the indexes closed down.