Wall Street ends sharply higher as Treasury yields dip

It seems we didn’t have to wait for Q3 reporting to begin to see a turnaround. All it took was today’s comment from the Chicago Fed prez that the Fed would likely achieve its goals by early 2023 that got the buying spree going again. This was quite a dramatic change from the recent rhetoric of rates continuing to climb through the end of 2023.  All three indexes had big gains with the biggest news being that the Treasury yields dropped substantially not only giving support to equities but also flattening out that inverted yield curve a good deal, now with the difference between the 2-year and 10-year in just one day cut in half. Volume was a tad above average at 11.7 billion. 

Wed  September 28, 2022  4:23 PM

Wall Street ends sharply higher as Treasury yields dip

By Noel Randewich and Shreyashi Sanyal

DJ: 29,134.99  -125.82        NAS: 10,829.50  +26.58         S&P: 3,647.29  -7.75        9/27

DJ: 29,683.74  +548.75       NAS: 11,051.64  +222.13       S&P: 3,719.04  +71.75     9/28

Sept 28 (Reuters) - Wall Street ended sharply higher on Wednesday following its recent sell-off, helped by falling Treasury yields, while Apple dropped on concerns about demand for iPhones.  The S&P 500 recorded its first gain in seven sessions after closing on Tuesday at its lowest since late 2020.  Interest rate-sensitive megacaps Microsoft , Amazon and Meta Platforms (META.O) rallied as the yield on 10-year Treasury notes fell over 0.26 percentage point in its biggest one-day drop since 2009.  Pushing yields lower on Treasuries with maturities six months and longer, the Bank of England said it would buy long-dated British bonds in a move aimed at restoring financial stability in markets rocked globally by the fiscal policy of the new government in London. read more

"The yield on the two-year Treasury has gone up persistently over the course of the last several weeks, and for the first time we've seen it go down for two days in a row, and that has given equities a breather," said Art Hogan, chief market strategist at B. Riley Wealth.  Investors have been keenly listening to comments from Federal Reserve officials about the path of monetary policy, with Atlanta Fed President Raphael Bostic on Wednesday backing another 75-basis-point interest rate hike in November. read more  The Fed will likely get borrowing costs to where they need to be by early next year, Federal Reserve Bank of Chicago President Charles Evans said. read more  U.S. stocks have been battered in 2022 by worries that an aggressive push by the Fed to raise borrowing costs could throw the economy into a downturn.

Apple Inc (AAPL.O) dropped 1.3% after Bloomberg reported the company is dropping plans to increase production of its new iPhones this year after an anticipated surge in demand failed to materialize. read more  Apple has been a relative outperformer in 2022's stock market sell-off, down about 15% in the year to date, versus the S&P 500's 22% loss.  All of the 11 S&P 500 sector indexes rose, led by a 4.4% jump in energy (.SPNY) and a 3.2% leap in communication services (.SPLRCL).

The Dow Jones Industrial Average (.DJI) rose 1.88% to end at 29,683.74 points, while the S&P 500 (.SPX) gained 1.97% to 3,719.04. It was the S&P 500's largest one-day gain since Aug. 10.  The Nasdaq Composite (.IXIC) jumped 2.05% to 11,051.64.

Biogen Inc (BIIB.O) surged 40% after saying its experimental Alzheimer's drug, developed with Japanese partner Eisai Co Ltd (4523.T), succeeded in slowing cognitive decline. read more  Eli Lilly & Co , which is also developing an Alzheimer's drug, jumped 7.5%, and it was among the biggest boosts to the S&P 500 index.

Advancing issues outnumbered declining ones on the NYSE by a 5.82-to-1 ratio; on Nasdaq, a 3.66-to-1 ratio favored advancers.  The S&P 500 posted one new 52-week high and 30 new lows; the Nasdaq Composite recorded 26 new highs and 224 new lows.

Volume on U.S. exchanges was 11.7 billion shares, compared with an 11.4 billion average for the full session over the last 20 trading days.