Edited By Barsha B. Baruah
Defying the gloomy start, stocks finally rallied on Wednesday on hopes of a better economy
U.S Stock markets correct a 3-day losing streak with a record showing as the S&P 500 and Dow Jones made their highest percentage gain in one single trading session on Wednesday, September 24t,2014, in over 5 weeks.
On Wednesday, September 24, 2014, the strong showing in U.S. new home sales for August bolstered the market sentiments, reversing the previous days of declines. The Dow Jones Industrial Average rose 0.9% to 17,210.06. The S&P 500 increased 0.78% to 1,998.30. The NASDAQ gained 1.03% higher to 4,555.22.
The stocks fell on Tuesday, September 23, 2014 on account of the combined U.S.-Arab airstrike launched on the Islamic State group’s military strongholds in Syria. The Dow Jones Industrial Average dropped 0.7% to settle at 17,055.87 while the S&P 500 fell 0.6% to 1,982.77. The NASDAQ composite index dropped 0.4% to 4,508.69.
The concerns over a slowing Chinese economy and a drop in the price of oil made the Wall Street take a sharp hit on Monday. After a blockbuster start on last Friday, China’s biggest online commerce company, Alibaba (NYSE: BABA), dropped by more than 4% on its second day of trading.
A soft economic data suggesting the growth in China, the No. 2 economy followed by the United States, was slowing, made the investors wary about China’s involvement in pushing down the oil prices, which eventually fell heavy on the energy stocks.
The S&P 500-stock index fell 16.11 points, or 0.8%, to 1,994.29. The loss was considered the biggest single-day decline for the index since August 5, this year. The Dow Jones industrial average dropped 107.06 points, or 0.6%, to 17,172.68. The Nasdaq composite index declined 52.1 points, or 1.1%, to 4,527.
These losses were significant, so much so that all 10 industry sectors that are a part of the S&P 500 declined. The energy stocks among them faced one of biggest declines, dropping at 1.4% as the price of oil fell. The companies that are dependant the most on consumer spending like entertainment and media multinationals, along with the retailers have also faced similar challenges.
Single family homes surge
New home sales in August increased 18% to a seasonally adjusted 504,000 units, the highest level since May 2008. The actual figure surpassed the economists’ estimated new homes sales that it would grow by 430,000 units last month.