Stocks climb back after steep slide on Fed, Ukraine jitters




In this photo provided by the New York Stock Exchange, trader Robert Charmak works on the floor, Monday, Jan. 24, 2022. The Dow Jones Industrial Average dropped more than 1,000 points Monday as financial markets buckled in anticipation of inflation-fighting measures from the Federal Reserve and fretted over the possibility of conflict between Russia and Ukraine. (Courtney Crow/New York Stock Exchange via AP)

NEW YORK (AP) — A volatile day on Wall Street ended Monday with stocks notching modest gains after climbing back from a steep slide that had knocked more than 1,200 points off the Dow Jones Industrial Average.

The late-afternoon comeback pulled the S&P 500 out of so-called correction territory — a drop of 10% or more from its recent high.

The market’s gyration reflected investors’ uncertainty over how aggressive the Federal Reserve’s inflation-fighting measures will be and the possibility of conflict between Russia and Ukraine.

“We’re in this wait-and-see mode, which is almost the most uncomfortable place to be, so I think the market is really grappling with that,” said Lindsey Bell, chief markets and money strategist at Ally Invest.

The S&P 500 ended 0.3% higher after having been down about 4%. The index has come back from a loss that big to notch a gain only three other times in the past. The tech-heavy Nasdaq index rose 0.6% after recovering from a nearly 5% descent.

Early in the day, benchmark stock indexes flirted with near 4-month lows as investors anticipated guidance from the Fed later this week about its plans to raise interest rates to tame inflation, which is at its highest level in nearly four decades.

The Fed’s short-term rate has been pegged near zero since the pandemic hit the global economy in 2020 and that has fueled borrowing and spending by consumers and businesses.

But rising prices at supermarkets, car lots and gas stations are raising concerns that consumers will pare back spending to limit the pressure on their budgets. Companies have warned that supply-chain problems and higher raw materials costs could crimp their profits.

The Fed has kept downward pressure on longer-term interest rates by buying trillions of dollars worth of government and corporate bonds, but those emergency purchases are scheduled to end in March. Nudging rates higher is intended to help slow economic growth and the rate of inflation.

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Investors are also keeping an eye on developments in Ukraine. Tensions soared Monday between Russia and the West over concerns that Moscow is planning to invade Ukraine, with NATO outlining potential troop and ship deployments.

The S&P 500 rose 12.19 points to 4,410.13. It’s now 8.1% below the all-time high it set on Jan. 3.

The Dow rose 99.13 points to 34,364.50. The Nasdaq gained 86.21 points to 13,855.13.

Small company stocks also bounced back. The Russell 2000 rose 45.59 points, or 2.3%, to 2,033.51. The index had been down 2.8%.

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Associated Press reporters Christopher Rugaber in Washington, Stan Choe in New York and David McHugh in Frankfurt contributed. Veiga reported from Los Angeles.

7 Electric Vehicle Stocks That Are Ready to Charge Higher

The Biden administration has announced a framework for a slimmed-down $1.5 trillion infrastructure bill. Part of that framework will be a $12,500 tax credit for electric vehicle purchases. That increases the current subsidy by $4,500. And it’s music to the ears of EV companies in the United States who are making plans to scale production.

This doesn’t mean the country is close to having an EV in every driveway. There is still the issue of a charging infrastructure. The chip shortage will be a headwind on auto production of all types for at least the next several quarters. And many EV companies are not even on the starting blocks yet.

But It does mean that momentum is building. And for investors who retreated to the sideline after the EV bubble burst in early 2021, it may be time to get back in the game.

In this special presentation, we’re looking at seven stocks that stand to benefit from these subsidies in the United States.

View the “7 Electric Vehicle Stocks That Are Ready to Charge Higher”.



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