Stock market today: Dow rebounds as fears of Evergrande give way to Fed

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Shares rose as fears over the China Evergrande group’s troubles fade for the moment and investors anxiously await the Federal Reserve meeting.

In the midday exchanges, the


Dow Jones Industrial Average

is up 200 points, or 0.6%. The


S&P 500

and the


Nasdaq composite

increased by 0.5% and 0.7% respectively. This came after the indices briefly dipped into the red, being part of a technical picture that indicates markets are still not fully confident in the market outlook.

Today’s gains should not put investors at ease yet. The Dow Jones is still below its 100-day moving average of 34,700 and horizontal support near 34,500, says Fiona Cincotta, senior financial markets analyst at City Index. These levels would have to be recovered to organize a “meaningful recovery,” she writes. The index is currently not even close.

Fears over China Evergrande appear to have subsided, at least for now. According to S&P Global, the Evergrande disaster is contained and does not currently require government support.

Still, investors will have to wait until Wednesday, when Chinese stock exchanges, now on vacation, come back online, to see the next major update. Evergrande continued its steady decline in Hong Kong, albeit more slowly, with a stock down 0.4%. Shares have fallen 84% so far this year.

“It effectively left the world hanging on Evergrande with no apparent solution to their $ 300 billion debt, with rating agencies slashing and slashing credit scores faster than Freddy Krueger with the teens, an interest payment due Thursday. that they probably won’t pay, and no sign from the government that they are inclined to let Evergrande collapse and burn or stage a bailout, ”said Jeffrey Halley, analyst at brokerage Oanda.

Read also : China Evergrande: what is it and why are investors worried?

Meanwhile, a key meeting of the U.S. Federal Reserve’s monetary policy-making committee, the Federal Open Market Committee, will begin on Tuesday, before Fed Chairman Jerome Powell makes a statement on Wednesday. Officials will also update projections for future interest rates and inflation.

Investors are watching the Fed closely for how and when the central bank will start slowing or reducing its monthly asset purchase schedule during the Covid-19 pandemic, which is adding liquidity to markets. “If the Fed implies a slowdown of more than $ 15 billion / month … likely market reaction: not good,” writes Tom Essaye, founder of Sevens Report Research.

In the United States, housing starts hit an annual rate of 1.615 million in August, up from 1.53 million in July, but single-family home construction fell 2.8% amid persistent bottlenecks. “Demand remains scorching, but automakers, who were already struggling to keep up, were forced to further limit production due to various supply and labor bottlenecks,” Stephen writes. Stanley d’Amherst Pierpont. “This is a recipe for relatively stable housing starts and sales, a continuing shortage of on-hand inventory and further increases in home prices.”

Overseas, Tokyo’s Nikkei 225 fell 2.2%, in a late response to Monday’s action as Japanese traders returned from a holiday Monday. Hong Kong’s Hang Seng Index rose 0.6% to rebound from five-year lows seen in the previous session. The pan-European Stoxx 600 rose 1%.

Commodity prices, which also fell sharply on Monday, rebounded. Futures for the international benchmark Brent oil rose 0.5% to about $ 74 a barrel. Copper prices first rose and then fell 0.1%.

Here are 12 actions in motion on Tuesday:


Universal music group

(UMG.Netherlands) – the label behind artists such as Justin Bieber, Taylor Swift and The Weeknd – has climbed more than 35% on its commercial debut in Amsterdam.

But the fortune of the former mother of UMG, the French media giant


Vivendi

(VIV.France), which retains 10% of the music group’s shares, were different. Vivendi collapses by 19% in Paris.


Warner Music Group

(WMG), meanwhile, climbed 8.4% after being outperformed to Outperform Neutral at Credit Suisse.


Uber Technologies

(UBER) gained 10.4% after raising its earnings forecast. Uber attributed the increase to “improvements in mobility and delivery.”


Lennar

The stock (LEN) initially fell before rising 0.2% after the homebuilder reported earnings of $ 3.27 per share, beating estimates of $ 3.24 per share, for revenue of $ 6.9 billion, below expectations of $ 7.1 billion. The company said supply chain constraints hamper its ability to meet sales targets, a challenge that will persist for the current quarter. Nonetheless, higher prices boosted the company’s gross margin and bottom line.


Johnson & johnson

(JNJ) action rose 1.1% after the company said its Covid-19 booster was 94% effective in the United States when given 2 months after the initial dose.


Automatic zone

(AZO) rose 4.6% after reporting earnings of $ 35.72 per share, beating forecast of $ 29.87 per share, on sales of $ 4.9 billion, ahead of expectations of $ 4.56 billion.


Bath and Body

(BBWI) gained 1.7% after upgrading to Buy from Hold at Argus.


Steven madden

(SHOO) jumped 4.3% after being upgraded to Buy from Hold at Jefferies.


Vail Hotels

(MTN) rose 1.5% after being overweighted to sector weighting ahead of the release of its results on Thursday.


Royal Dutch Shell

(RDS.A) increased by 4% the Anglo-Dutch oil major said it would leave America’s largest oil field by selling its Permian Basin assets to


ConocoPhillips

for $ 9.5 billion.


ConocoPhillips

(COP) rose 3.6% in New York.

Write to Ben Levisohn at [email protected] and Jacob Sonenshine at [email protected]

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