• Home
  • Stock News
  • Market Snapshot: Dow stages unprecedented 1,214-point intraday reversal, and all 3 major indexes end higher in tumultuous Monday

Post: Market Snapshot: Dow stages unprecedented 1,214-point intraday reversal, and all 3 major indexes end higher in tumultuous Monday

The Dow industrials staged their first-ever 1,000-point-plus intraday U-turn to result in a gain, while other notable benchmarks also rallied in the final minutes of trading and reversed a sharp selloff.

Investors are awaiting an important two-day meeting of the Federal Reserve, the first of the year, that is set to kick off on Tuesday and could set the tone for the rest of what has been a brutal year for bullish investors.

What’s happening
  • The Dow Jones Industrial Average

    eked out a gain of 99.13 points, or 0.3%, to finish at 34,364.50. The index had been as low as 33,150.33 during the session, marking a 1,214.17-point turnaround. It is the first time in the Dow’s history that the index has closed positive after being down at least 1,000 points.

  • The S&P 500 index

    finished up by 12.19 points, or 0.3%, at 4,410.13 after having traded handily below the level that qualifies as a correction during the day. The index had been down by as much as 4% during the day, marking its biggest comeback in percentage terms since Oct. 23, 2008.

  • The Nasdaq Composite Index

    closed up by 86.21 points, or 0.6%, at 13,855.13, snapping a four-day losing streak.

What’s driving markets

The final 10 minutes of trading saw all three major stock indexes close higher —capping a dramatic day of trading that began with markets in free fall Monday morning. At one point, Dow industrials were down by as much as 1,115.04 points amid persistent uncertainty and angst, ahead of Wednesday’s Federal Open Market Committee decision and a wave of earnings reports.

Monday’s early stock-market selloff “was a reflection of surprise and fear,” said Mike Zigmont, head of trading for Harvest Volatility Management in New York. “But despondency turned into optimism and potentially greed, and now investors are thinking about the profit opportunities instead of the risk of losses.”

Volatility, whether observed or implied, has picked up “solely as a function of this cascading selling event that started this year, and came to a crescendo midday” on Monday, Zigmont said via phone. “A lot of it is trend-following, with computers that are doing the algorithms if the intraday path breaks downward. But it also works to the upside.”

Mark Hackett, chief of investment research at Nationwide, said that the market was being driven lower earlier in the day by three areas of concern: 1) fundamental deterioration in corporate earnings; 2) investor fear over Fed policies and geopolitical tensions; 3) investor sentiment starting to crack as technical levels breakdown for equity benchmarks.

Indeed, the S&P 500 fell into correction territory, dropping to as low as 4,222.62, but managed to avoid closing below the 4,316.90 level that would have marked an official correction. A correction is typically defined as a 10% decline from the index’s Jan. 3 record close, according to Dow Jones Market Data.

Read: S&P 500 is close to a correction. Here’s the number it needs to avoid

Meanwhile, popular assets sank, with Netflix

shares finishing 2.6% lower after swooning on Friday, which contributed to investor concerns about corporate earnings and the economic outlook over much of the day.

The political environment also is a question mark with U.S. and European diplomats meeting on how they can respond to the threat posed by Russia to Ukraine. The Russian ruble

fell on Monday to the weakest level in more than a year.

Read: How a Russian invasion of Ukraine could trigger market shock waves

“Investors are also probably reacting to some of the geopolitical tension between Russia and Ukraine, which is increasing the level of uncertainty,” said Dan Eye, chief investment officer at Fort Pitt Capital Group in Pittsburgh, which oversaw $5.3 billion as of December.

“The volatility we’re seeing is normal. As the Fed pivots toward fighting inflation, we’re going to see an environment of more push-and-pull and drawdowns in the stock market than we’ve seen over the last two years,” Eye said via phone. 

Which companies are in focus?
  • Shares of electric-vehicle maker Tesla Inc.

    finished lower by 0.4%, with the company run by Elon Musk set to report corporate results on Wednesday.

  • Shares of retailer Kohl’s Corp.

    closed up by 36% after a group backed by activist hedge fund Starboard Value offered roughly $9 billion to buy the department store chain.

  • Shares of Macy’s Inc.

    and Nordstrom Inc.

    finished 18% and 13% higher, respectively, after the news of activistism focused on Kohl’s.

  • GameStop’s stock

    closed lower by 5.8% in Monday’s action, after bouncing 3.6% on Friday to snap an eight-day losing streak, while shares of AMC Entertainment Holdings Inc. AMC finished down by 7.4% for an eighth straight session of declines. 

  • U.S.-listed shares of AstraZeneca AZN closed 3.6% lower Monday after the company said it received an orphan-drug designation for its experimental treatment for transthyretin-mediated amyloidosis, a rare condition that causes heart failure and death within years of diagnosis.

  • Shares of Halliburton Co. HAL closed 3.8% higher Monday, after the oil-services company swung to a fourth-quarter net profit and reported revenue that rose above forecasts and boosted its quarterly dividend by 167%.

  • Merck & Co. Inc.’s stock MRK finished 1.4% lower after the company said the Food and Drug Administration requested additional information about its experimental cough treatment. 

How are other assets faring?
  • The yield on the 10-year Treasury note fell 1.2 basis points to 1.735%, down from Friday’s 3 p.m. Eastern time level of 1.747%. Treasury yields and prices move in opposite directions. The rate is down 9.8 basis points over the last two trading days, the largest two-day decline since Nov. 29, 2021, based on 3 p.m. levels, according to Dow Jones Market Data.

  • The ICE U.S. Dollar Index DXY, a measure of the currency against a basket of six major rivals, was up 0.3%.

  • The February gold contract gained $9.90, or 0.5%, to settle at $1,841.70 an ounce on Monday. March WTI oil lost $1.83, or almost 2.2%, to settle at $83.31 a barrel.

  • bitcoin BTCUSD was trading up 4.4% at about $36,933.

  • The Stoxx Europe 600 SXXP finished 3.8% lower, while London’s FTSE 100 UKX closed down by 2.6% on Monday.

  • The Shanghai Composite SHCOMP ended fractionally higher. China’s CSI 300 000300 and Japan’s Nikkei 225 NIK each closed up by 0.2%. The Hang Seng

    finished 1.2% lower in Hong Kong.

Steve Goldstein contributed to this article.

Add Your Heading Text Here

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.

Market Insiders