Wall Street Extends Rebound to Second Day Amid Worries of Economic Slowdown

Barry Adams
07 Aug, 2024
New York City

Stocks rebounded on Wall Street for the second day in a row as market sentiment stabilized. 

The S&P 500 index gained more than 1% and the Nasdaq Composite advanced closer to 2% as investors surmised that the recent three-day sell-off may have been overdone. 

Investors debated the health of the U.S. economy and looked for alternative indicators to assess the underlying drivers, such as rail cargo loadings, ocean freight demand, online traffic at shopping sites, and credit card charge volumes. 

Market indexes rebounded on Wednesday after falling sharply in the previous three sessions in a row, following worries that labor market conditions are deteriorating faster than previously estimated and factory activities shrank for the third month in a row in June. 

Moreover, market sentiment was weak after mega-cap tech companies reported weaker-than-expected earnings results, stoking fears that the elevated capital expenditure to build out artificial intelligence infrastructure may be cut. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index gained 1.3% to 5,311.19, the Nasdaq Composite advanced 1.7% to 16,620.93, and the Russell 2000 index rose 1.1% to 2,086.65. 

The yield on 2-year Treasury notes edged higher to 4.0%, 10-year Treasury notes increased to 3.93%, and 30-year Treasury bonds advanced to 4.23%.

WTI crude oil increased $1.71 to $74.69 a barrel, and natural gas prices edged up 9 cents to $2.10 a thermal unit.

Gold increased by $19.65 to $2,403.78 an ounce, and silver declined by $0.07 to $27.07. 

The dollar index, which weighs the US currency against a basket of foreign currencies, edged lower to 103.18.

 

U.S. Stock Movers 

Airbnb plunged 14.2% to $111.92 after the online booking platform reported a weaker-than-expected third-quarter outlook. 

The booking platform operator estimated revenue to fall between $3.67 billion and $3.73 billion, slightly below analysts expectations of at least $3.85 billion. 

Wynn Resorts declined 0.3% to $76.10 after the casino and resort operator reported weaker-than-expected revenue in the second quarter. 

Reddit dropped 6% to $51.08, despite the social news company reporting better-than-expected second quarter revenue and earnings and issuing third quarter revenue in line with market expectations. 

The company estimated revenue in the third quarter to fall between $290 million and $310 million. 

Walt Disney & Company decreased 2.5% to $87.77 after the theme park operator reported better-than-expected quarterly results. 

Lyft Inc. dropped 16.6% to $9.15, and the digital ride-hailing company issued weaker-than-expected third-quarter revenue guidance. 

The company estimated gross booking in the third quarter to range between $4.0 billion and $4.1 billion and adjusted operating earnings between $90 million and $95 million. 

CVS Health decreased 0.6% to $57.95 after the drugstore chain operator reported better-than-expected second quarter earnings, but the company lowered its full-year net income outlook, citing higher costs. 

Super Micro Computer dropped 14.3% to $528.77 after the computer server company reported weaker-than-expected fiscal fourth quarter earnings. 

The company also announced a 10-for-1 stock split.