Optimism On Wall Street Lifts S&P 500 and Nasdaq 2%

Barry Adams
03 Oct, 2022
New York City

Stocks on Wall Street rebounded after a difficult week, month and quarter as bond yields eased. 

Market indexes turned higher after the Institute for Supply Management's manufacturing index declined to 50.9 in September. 

The weakening manufacturing activities lifted hopes that the Fed may slow down the rate hike pace and help the economy to regain its growth. 

Stocks rebounded from oversold positions as traders searched for bargains in tech and energy sectors. 

The S&P 500 index and the Nasdaq Composite index declined for the third quarter in a row and investors bid up stocks on the first trading of the fourth quarter. 

Investors are also bracing for earnings revisions ahead of the earnings season kickoff next week. 

The S&P 500 index increased 2.6% to 3,677.71 and the Nasdaq Composite index rose 2.2% to 10,812.85.  

Energy complex stocks led the gainers on Wall Street. Exxon Mobil, Chevron, Hess and Schlumberger jumped between 4% and 5%. 

Tesla Inc declined 8.5% to $243.49 after the company announced record deliveries of 343,000 electric vehicles in the third quarter, missing the estimate of at least 350,000 set by some investors. 

Norwegian Cruise Line Holdings jumped 0.4% to $11.40 after the company removed all Covid-19 testing, masking, and vaccination requirements from October 4.  

 

Treasury Yields Edge Lower 

The yield on 2-year Treasury notes decreased to 4.12% after rising as much as 4.3% in the last week of September, 10-year notes dropped to 3.66% and 30-year bonds fell to 3.68%. 

 

Oil Jumps 5%

Crude oil prices jumped more than 5% in early trading ahead of the meeting of OPEC+ nations Wednesday. 

The energy producing nations are expected to cut as much as one million barrels a day as member nations seek higher prices for crude oil. 

Crude oil jumped $3.93 to $83.42 to a barrel  and natural gas declined 25 cents to $6.50. 

Brent crude oil jumped 3.9% to $88.57 and the TTF natural gas price declined 10.0% to 169.91 euros a megawatt hour. 

 

Silver Up 9%, Coal Plunges 9%  

Silver jumped 9% as traders sought bargains in precious metals and gold gained 2.4%. 

Coal plunged below $400 a ton from as high as $434 after China pledged to increase its production capacity by as much as 300 million ton, covering its entire annual imports. 

 

Swiss Inflation Drops in September 

Inflation rate in Switzerland unexpectedly declined to 3.3% in September from 3.5% in August, the Swiss Federal Statistics Office said Monday. 

 

Pound Rebounds After UK Abandons Tax Cut for Top Bracket

European markets advanced after a week of losses and the British government reversed its recent tax proposal in the mini-budget after market turmoil and party rebellion. 

Finance minister was forced to reverse some of the proposals after bond and currency markets went into a tailspin and several members of his party rebelled. 

Finance minister Kwasi Kwarteng said that the government will not cut tax rate to 40% from 45% for income higher than 150,000 pounds. 

"It is clear that the abolition of the 45 percent tax rate has become a distraction from our overriding mission to tackle the challenges facing our country," said Chancellor of the Exchequer Kwasi Kwarteng in a statement released Monday. 

The euro edged lower to 97.65 U.S. cents and the British pound edged higher to $1.12. 

 

European Markets Close Higher 

European markets traded higher on the first day of the fourth quarter after global growth worries resurfaced.

Market indexes reversed earlier losses of as much as 1.5% on worries lingered. and closed higher following rising markets in New York. 

Purchasing Managers' Index for manufacturing declined to a 27-month low of 48.4 in September from 49.6 in August, S&P Global said in a report Monday. 

The euro zone manufacturing sector growth contracted at the fastest pace since mid-2020 after production and orders declined in the month.   The index was lowered from 48.5 in the preliminary reading. 

Any reading below 50 indicates contraction and above shows growth. 

Rising prices and falling demand volumes further weakened the manufacturing sector. France and Germany both registered the worst declines and dropped to the lowest levels last seen in the first-half of 2020.  

The DAX index roe 0.8% to 12,209.48, the CAC 40 index gained 0.59% to 5,794.105 and the FTSE 100 index increased 0.2% to 6,908.76. 

 

Europe Stock Movers 

Credit Suisse AG dropped 5.9% to 3.61 Swiss francs and the troubled investment bank assured investors over the weekend about the health of the company. 

Natuzzi SpA jumped 15.3% to $6.79 after the Italy-based leather furniture maker reported sixth consecutive quarterly revenue growth in a row. 

Revenue in the fiscal second quarter increased 7.8% to