Weekly Gains: Nasdaq Up 5.8%, S&P 500 Rises 4.7%

Barry Adams
21 Oct, 2022
New York City

Stocks staged a sharp rebound on Wall Street on the hopes that the Federal Reserve may slow the pace of future rate hikes and avoid economic recession. 

The Federal Reserve is widely expected to lift rates by 75 basis points at the next meeting ending on November 2. 

In recent days Fed officials have also carried out a campaign with a hawkish tone suggesting that the rates may rise above 4.75% and stay there for a while until the inflation drops to the Fed's target rate of 2%. 

The wide gulf between the Fed's target inflation rate of 2% and the current rate above 8% has also stoked the fears that the central bank may not be able to avoid a recession. 

However, in today's trading stocks staged a rebound on the hope that the Fed may try to avoid a recession and not continue its aggressive rate hike campaign. 

The S&P 500 index rose 2.4% to 3,752.75 and the Nasdaq Composite jumped 2.3% to 10,859.72.

For the week, the S&P 500 increased 4.7% and the Nasdaq Composite added 5.8%. 

Major averages registered best weekly gains since June. 

Crude oil increased 48 cents to $84.98 a barrel and natural gas fell 36 cents to $4.98 a thermal unit. 

The yield on 2-year Treasury notes decreased to 4.58%, 10-year Treasury notes eased to 4.28% and 30-year bonds fell to 4.34%. 

On the earnings front, American Express declined 2% despite reporting higher-than-expected quarterly earnings and lifting annual outlook. 

Snap Inc plunged 28.2% after the social media company reported $1.12 billion in revenues, lower than expected, but adjusted quarterly earnings of 8 cents a share. 

Verizon dropped 4.5% after the wireless communication company reported smaller-than-expected post-paid net subscribers. 

CSX Corp rose 1.7% after the railroad operator posted better-than-expected earnings on higher shipping volumes and improvement in freight rates. 

 

European Markets Extend Gains, Rate and Recession Worries Linger

European markets traded lower on the ongoing worries of looming recession and rising bond yields. 

The UK retail sales fell 1.4% in September following the revised 1.7% decline in August, the Office for National Statistics said Friday. 

A separate report showed a slight improvement in consumer confidence in October despite soaring inflation and political chaos. 

The confidence index improved to -47 in October from -49 in September, showed  the survey from the market research group GfK released Friday.  

The DAX index rebounded from the loss of 2% to 0.3% to 12,730.90 the CAC-40 index fell 0.9% to 6,035.39 and the FTSE 100 index advanced 0.4% to 6,969.73.  

For the week, the DAX index increased 2.4%, the CAC-40 index gained 2.6% and the FTSE 100 index gained 2.1%.  

The euro held stable near 98.05 U.S. cents and the British pound declined to $1.1203. 

Brent crude oil gained $1.18 to $93.55 a barrel and TTF natural gas futures declined 10.3% to 114.0 euros a MWh. 

The yield on 10-year German bunds rose to a new 11-year high of 2.43%, French bonds to 2.98%, the UK Gilts to 4.05% and Italian bonds to 4.76%. 

Adidas AG declined 9.5% to