U.S. stocks made a dramatic comeback in the late afternoon session on Thursday after President Joe Biden imposed a new round of harsher sanctions against Moscow after Russia’s President Vladimir Putin ordered a full-fledged war against Ukraine. All the three major indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.3% or 92.07 points to end at 33,223.83 points, after declining as much as 2.6% or 869 points in the early hours of trading.
The S&P 500 gained 1.5% or 63.2 points to finish at 4,288.70 points. However, the index is still in correction territory and at one point of the day had declined more than 2.6%. Technology and communication stocks led the rally.
The Technology Select Sector SPDR (XLK) added 3.4%, while the Communication Services Select Sector SPDR (XLC) gained 2.8%. Seven of the 11 sectors of the benchmark index ended in positive territory.
The tech-heavy Nasdaq climbed 3.3% or 436.1 points, to close at 13,473.59 points. The index fell 3.5% during Thursday’s the early trading session.
The fear-gauge CBOE Volatility Index (VIX) was down 2.26% to 30.32. A total of 17.52 billion shares were traded on Thursday, higher than the last 20-session average of 12.1 billion. Advancers outnumbered advancers on the NYSE by a 1.14-to-1 ratio. On Nasdaq, a 1.53-to-1 ratio favored advancing issues.
Markets Make Dramatic Comeback
Markets opened in the red on Thursday with all major indexes trading more than 2.5% lower, after Russia launched a full-fledged attack on Ukraine. Investors looking for security rushed to buy safe-haven stocks, pushing down bond yields, including the 10-year Treasury yield.
This gave a boost to the dollar, while gold price surged to its highest level in more than a year. However, as the day passed, investors got back much of their confidence as market watchers said that the invasion of Ukraine was long predicted.
Following that, Biden also announced a new set of harsher sanctions on Russia. As investors shifted focus from the Russia-Ukraine war, market somewhat stabilized and gradually made a dramatic comeback sending stocks on a rally.
Much of Thursday’s rally was led by tech stocks as many investors bought on the dip. Shares of Netflix, Inc. NFLX jumped 6.1%, while Amazon.com, Inc. AMZN and Microsoft Corporation MSFT gained 4.5% and 5.1%, respectively. Amazon has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Labor Department said on Thursday that initial jobless claims fell to 232,000, declining 17,000 for the week ending Feb 19. The four-week moving average also declined to 236,250, a decrease of 7,250 from the previous week’s revised average of 243,500.
Continuing claims came in at 1,476,000, declining 112,000 from previous week’s revised level. The previous week’s numbers were revised down by 5,000 from 1,593,000 to 1,588,000. The 4-week moving average came in at 1,576,000, a decrease of 49,000 from the previous week’s revised average.
A separate report from the Commerce Department showed that GDP increased an annualized rate of 7% in the fourth quarter of 2021. The full-year growth came in at 5.7%, the highest since 1984.
U.S. new home sales fell 4.5% in January to an annualized rate of 801,000 units, according to a report released by the Commerce Department.
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