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Stocks are bouncing back after an ugly start to the month
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US stocks are rebounding after a very ugly start to the month.
Near 9:31 a.m. ET, the Dow was up 190 points, the S&P 500 was up 19 points, and the Nasdaq was up 6 points.
The rally on Wednesday morning pulled the S&P 500 out of correction territory – defined as a 10% drop from recent highs.
Stocks had the worst start to September in 13 years, and this is historically the weakest month of the year for US equities. On Tuesday, the three major indexes fell nearly 3%.
Experts pointed, again, to concerns that the world economy was slowing down and what this meant for US stocks. We got ISM manufacturing data from China and the eurozone, showing that the sector was softer in both regions. Meanwhile, we learned that Canada entered a recession after its economy shrank for a second straight quarter.
In a morning note to clients, Deutsche Bank's Jim Reid wrote of the volatile market environment: "One of the biggest problems we face is that there is no historical template for current global market conditions so we're all flying blind to a large degree. Never before have so many of the most important countries in the world printed so much money and left base rates at near zero for so long. Also never before has the largest economy in the world tried to start a slow process of reversing said extraordinary policy."
We're just two days away from getting the biggest jobs report in several years, since many market participants had wagered that the economy was improving at a decent enough pace to warrant a rate hike from the Federal Reserve later this month. Those bets declined after the stock market's wild swings, but Friday's nonfarm payrolls data will still be incredibly significant and closely watched.
And Wednesday morning, we got the first snapshot of how the labor market did last month through the ADP private payrolls numbers. At 190,000, private-payrolls growth missed expectations.
Other data due Wednesday includes factory orders and anecdotes on the economy's health contained in the Federal Reserve's beige book.
Also, the Energy Information Administration is set to release the weekly level of oil inventories. A separate print on Tuesday, from the American Petroleum Institute, indicated a build by 7.6 million barrels, the largest since April 7.
On Tuesday, West Texas Intermediate crude oil collapsed more than 10% to wipe out its biggest three-day gain in 25 years, as the industry continues to assess the extent of oversupply in the market.
By the stock market open, WTI had turned around, and climbed to as high as $45.70 per barrel, less than 1%, after falling about 3% earlier.
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