U.S. Stocks Rebound from Biggest Drop in a Year

Strategic Insights -

U.S. stocks experienced a significant rally, marking a rebound from their biggest drop in a year, driven by investor speculation that the market may have overcorrected in response to Europe's debt crisis. Compuware Corp., a business software maker, saw a notable gain after reporting a 34% higher-than-estimated quarterly profit. Meanwhile, financial shares, led by JPMorgan Chase & Co. and Bank of America Corp., surged, while Dell Inc. slipped, missing some analyst estimates.

Key Takeaways:

  • Compuware Corp. rallied 9.6% to $7.97 after reporting a 34% higher-than-estimated quarterly profit.
  • Freeport-McMoRan Copper & Gold Inc. led materials companies higher, gaining 5.3% as the price of copper rose 4%.
  • Financial shares, including JPMorgan Chase & Co. and Bank of America Corp., jumped, with JPMorgan advancing the most in the Dow Jones Industrial Average.
  • The S&P 500 rose 1.5% to 1,087.69, with all 10 industry groups losing at least 2% this week.
  • David Katz, chief investment officer at Matrix Asset Advisors Inc., stated that the panic and selloff are mostly done, and it's a good time to add to equity exposure.
  • Six months and nine months from now, investors may regret not having bought more during this time.
  • German lawmakers approved their country's share of a $1 trillion euro-region bailout, allaying market concerns.

Statistics:

  • The S&P 500 fell 3.9% to 1,071.59 on the previous day, marking the biggest drop in 13 months.
  • The index started trading at about 15.5 times reported earnings of its companies, the lowest level since July.
  • Copper advanced 4% to $3.061 a pound in New York, driven by speculation that demand will remain ample in China.
  • Aluminum, lead, and zinc gained in London.
  • Five stocks gained for every two that fell on U.S. exchanges.

Sources:

  • Bloomberg data
  • Euclid Infotech Pvt. Ltd. (Provided by Syndigate.info an Albawaba.com company)