Stocks gain ground, clawing back a piece of last week's drop

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JUST IN: Stocks rose broadly on Wall Street, clawing back some of the ground they lost in their worst weekly drop since the beginning of the pandemic.

A woman wearing a face mask walks past a bank's electronic board showing the Hong Kong share index in Hong Kong, Tuesday, June 21, 2022. Asian stocks rebounded Tuesday as Wall Street futures moved higher while U.S. markets were closed for a holiday. &P 500 rose 2.6% as of 1:19 p.m. Eastern. The Dow Jones Industrial Average rose 611 points, or 2.1%, to 30,499 points and the Nasdaq jumped 3%.Retailers, health care companies and banks also made solid gains. Kellogg rose 2.

Stocks have been generally sliding as investors adjust to higher interest rates that the Federal Reserve and other central banks are increasingly doling out. The aggressive rate hikes are part of a plan to temper record-high inflation, but investors are worried that the Fed risks slowing economic growth too much and bringing on a recession.

The lingering list of worries has made for an extremely turbulent market. Daily swings between gains and losses has been common and major indexes have sometimes shifted between sharp gains and losses on an hourly basis. Last week, the Fed hiked its key short-term interest rate by triple the usual amount for its biggest increase since 1994. It has also just begun allowing some of the trillions of dollars of bonds it purchased through the pandemic to roll off its balance sheet. That should put upward pressure on longer-term interest rates and is another way central banks are yanking supports earlier propped underneath markets to bolster the economy.

 

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