Daily market review

United States

Investors bought the dip in FANMAG and other tech/growth stocks to lead equities higher Tuesday and regain much of Monday's declines. The Dow Jones industrial average gained 0.9 percent, the S&P 500 rose 1.1 percent, and the NASDAQ rallied 1.3 percent.

Sentiment drew support from reports suggesting congressional Democrats were narrowing their differences over infrastructure spending, and from an unexpectedly positive US services purchasing managers' report.

Megacaps including Apple, up 1.4 percent, Microsoft, up 2.0 percent, and Netflix, up 5.2 percent, saw good buying after big losses Monday. Facebook, which dropped Monday on regulatory worries and news of a big outage in service, bounced up 2.1 percent even as a high-profile Senate hearing probed the social network's business practices.

Among sectors, banks led the market higher with money center banks rallying as market rates continued higher. Amazon, up 1.0 percent, offset weakness in retailers and restaurants to lift consumer discretionary. Communications services outperformed with Netflix leading, along with Twitter, up 2.5 percent. Energy stocks outperformed with rising oil prices, but ended well down from the day's highs. Utilities and real estate, defensive plays, lagged along with consumer staples.

Among companies in focus, Ralph Lauren rose 1.8 percent after an analyst upgrade. Fortinet, the cybersecurity firm, rose 3.3 percent after a positive analyst comment. On the downside, Lordstown Motors, the Ohio-based electric-vehicle maker, fell 11 percent after an analyst downgrade. Comtech Telecomm also fell 11 percent after cutting its guidance.

In economic news, the Institute for Supply Management's services index rose to 61.9 in September from 61.7 in August, above Econoday's consensus forecast for 60.0.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose US$1.53 to US$82.79 while spot gold fell US$8.34 to US$1,760.10. The US dollar rose vs. most major currencies. The US Treasury 30-year bond yield rose 5 basis points to 2.10 percent and the 10-year note yield rose by 5 basis points to 1.53 percent.


Bargain-hunting after recent losses and a rally in bank stocks powered a recovery in equities. The Europe-wide STOXX 600 rose 1.2 percent, the German DAX gained 1.1 percent, the French CAC jumped by 1.5 percent, and the UK FTSE 100 rose 0.9 percent.

Tech stocks bounced after seven days of consecutive losses. Bank stocks advanced on the reopening trade after an upgrade at JP Morgan based on expectations for rising interest rates and better earnings. Other winners included media, oil & gas, industrials, basic resources, insurance, and financial services. Lagging but still higher were travel & leisure, construction & materials, food & beverage, health care, and real estate.

Among companies in focus, Infineon, the German chipmaker, rose 5.3 percent after upbeat guidance. Hotel Chocolat, the UK chocolate retailer, rose 11 percent after announcing strong results and plans to raise prices. On the downside, GM Store Nord, the Danish audio equipment maker, fell 7.0 percent after cutting its guidance. Grenke, the German office equipment maker, fell 2.5 percent on a disappointing trading update.

Asia Pacific

Asian markets slipped as rising oil prices added to concerns over inflation and slower growth, with growth and big tech stocks leading the declines.

The ongoing rally in oil and other fuel prices lifted energy shares to help Hong Kong's Hang Seng index edge up by 0.3 percent. Yanzhou Coal Mining was among the day's winners, up 3.3 percent. On the downside, Chinese property stocks remained under pressure along with tech stocks. Another property developer, Fanstasia Holdings, saw its stock suspended after reportedly missing a debt payment. Tech and growth stocks suffered from valuation concerns amid rising interest rates, and from the ongoing Chinese regulatory crackdown.

South Korea's KOSPI fell 1.9 percent as the tech-heavy index tracked Monday's losses on Wall Street. Taiwan's Taiex index managed to end up 0.3 percent as the initial losses attracted bargain-hunting.

Inflation and growth worries linked to rising oil prices undercut Japanese equities with the Nikkei 225 index down 2.2 percent and the broader Topix off 1.3 percent. The market also suffered from what is known as "Kishida shock" after incoming Japanese Prime Minister Fumio Kishida reportedly said he might consider raising capital gains taxes. Among companies in the news, Fast Retailing fell 6.9 percent after reporting a big drop in September same-store sales at its Uniqlo stores. Softbank declined 3.8 percent as its big tech investments have lost value.

Australian shares slipped with most sectors lower and the All Ordinaries down 0.5 percent. Tech stocks were hit after the Wall Street tech selloff. The Reserve Bank of Australia policy meeting was a non-event as it left rates and asset purchases unchanged. Among stock sectors, reopening plays fell back with retailers and gaming stocks down after their gains Monday. Materials were mixed with precious metals better and iron ore lower. Financials also lagged. Energy fared best, with liquefied natural gas stocks gaining. Woodside Petroleum gained 4.0 percent.

Looking ahead*

In Asia/Pacific, the following are due for release: Hong Kong PMI and a Reserve Bank of New Zealand rate announcement. In Europe, reports are scheduled on: German manufacturers' orders, UK PMI construction, and Eurozone retail sales. In North America, the ADP employment report is due.

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