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Wall Street Rallies, Technicals Help Market Rebound

Published: October 13, 2022
Raindrops hang on a sign for Wall Street outside the New York Stock Exchange in Manhattan, New York on October 26, 2020. (Image: REUTERS/Mike Segar)

NEW YORK (Reuters) — U.S. stocks ended sharply higher on Thursday, Oct. 13 as investors pulled back on Wall Street from bearish bets after a disappointing consumer prices report and as technical support helped drive a rebound.

Energy and financials led gains among S&P sectors. Markets were sharply lower earlier in the day after the headline consumer price index rose at an annual pace of 8.2 percent in September, compared with an estimated 8.1 percent rise.

Core CPI, which excludes volatile food and fuel prices, gained 6.6 percent last month, compared with estimates of a 6.5 percent rise. The reading was higher than a 6.3 percent rise in August.

“People were perhaps net short going into the CPI report, and saw the report being negative and started covering their shorts,” said King Lip, chief investment strategist at Baker Avenue Asset Management in San Francisco.

Some strategists also pointed to some technical support levels around the 3,500 mark for the S&P 500.

According to preliminary data, the S&P 500 gained 92.38 points, or 2.58 percent, to end at 3,669.41 points, while the Nasdaq Composite gained 227.30 points, or 2.18 percent, to 10,644.40. The Dow Jones Industrial Average rose 829.08 points, or 2.84 percent, to 30,039.93.

“It’s technical factors,” Lip said, adding that the recent steep selloff in stocks may mean “bad news may have already been discounted.

“Going into earnings season, all we really need is things to be not as bad as suspected,” he said.

Big Wall Street banks kick off third-quarter reporting season on Friday, Oct. 14 with investors awaiting to see how a high interest-rate environment affects their profits.

Walgreens Boots Alliance Inc rose following better-than-estimated fourth-quarter results.

By Reuters. (Additional reporting by Bansari Mayur Kamdar, Ankika Biswas and Shreyashi Sanyal in Bengaluru; Editing by Saumyadeb Chakrabarty, Anil D’Silva, Arun Koyyur and Deepa Babington)