By
Steve Muchoki
April 16th, 2024
Monday’s dip which represents accounts for one of the biggest drops in the Dow Jones in the past year was cushioned with the latest gains. However, the 30 stock index is still about 1.6% below its best level attained last week.
The US stock market is trailing a path of recovery after a woeful close to Monday’s trading session as marked by the massive rebound in the Dow Jones. The latest resurgence spells an indication that Wall Street investors capitalized on the discount received from the slump, sending major indices like the Dow Jones Industrial Average (INDEXDJX: .DJI) to experience the highest daily gains in over a month.
The Dow rose 1.62%, adding 549.95 points to close at 34,511.99. The S&P 500 (INDEXSP: .INX) also trailed the growth path by climbing 1.52% to 4,323.06. This growth helps the broad market index to par off some of Monday’s losses. The Nasdaq Composite also finished strong, adding 223.89 points atop a 1.57% gain to close Tuesday’s trading day at 14,498.88.
The broad drop in the valuation in the stock market was fueled by concerns the new COVID-19 Delta variant will become more pervasive and cripple the economy that is still on its path of recovery. The swift rebound in indices like the Dow Jones and S&P 500 was ignited as a result of gains in Treasury yields which largely allayed these concerns.
“We remain constructive on equities and see the latest round of growth and slowdown fears premature and overblown,” wrote Dubravko Lakos-Bujas, head of U.S. equity strategy at JPMorgan, in a note Tuesday. The analyst raised his year-end price target for the S&P 500 to 4,600 from 4,400, representing a gain of 8% from Monday’s close.
Monday’s dip which represents accounts for one of the biggest drops in the Dow Jones in the past year was cushioned with the latest gains. However, the 30 stock index is still about 1.6% below its best level attained last week.
Major Company’s Stock Sees Rebound Alongside the Dow Jones
The bulk of publicly-listed stocks that the COVID-19 resurgence news stirred a slump in their prices also received a fair rejuvenation on Tuesday. Coming off as one of the biggest losers in the COVID-19 pandemic saga, airlines including Delta Air Lines, Inc (NYSE: DAL) which shed off about 4% following Monday’s dip grew 5.45% to $40.66. American Airlines Group Inc (NASDAQ: AAL) also added 8.38% to topple Monday’s losses.
Investors are very sensitive as many sold off their stocks on fears that the new COVID-19 Delta variant will slow down their firm’s growth push according to Chris Zaccarelli, CIO at Independent Advisor Alliance.
“We don’t believe that that’s the case and are willing to let the sell-off run its course and buy the dip on the belief that the economy will fully recover and return to its prior growth trajectory, bringing most of the cyclical companies in the airline, travel and leisure industries along with it,” he said.
Other analysts like Jim Cramer believe the sell-offs will aid in sieving out speculators from the market, a situation that can help secure a more sustainable recovery.