Wall Street Rallies To Bounce Back From Its Worst Day in Nearly 2 Years, as Japanese Stocks Rebound

American stocks are bouncing back, and calm is returning to Wall Street after Japan’s market soared earlier Tuesday to claw back much of the losses from its worst day since 1987.The S&P 500 was rallying by 1.6 percent in midday trading and on track to break a brutal three-day losing streak. It had tumbled a bit more than 6 percent after several weaker-than-expected reports raised worries the Federal Reserve had pressed the brakes too hard for too long on the American economy through high interest rates in order to beat inflation.The Dow Jones Industrial Average was up 480 points, or 1.2 percent, as of 11 a.m. Eastern time, and the Nasdaq composite was 1.7 percent higher. The vast majority of stocks were climbing in a mirror opposite of the day before, from smaller companies that need American households to keep spending to huge multinationals more dependent on the global economy.Stronger-than-expected profit reports from several big American companies helped drive the market. Kenvue, the company behind Tylenol and Band-Aids, jumped 12.7 percent after reporting stronger profit than expected thanks in part to higher prices for its products. Uber rolled 7.9 percent higher after easily topping profit forecasts for the latest quarter.Caterpillar veered from an early loss to a gain of 3.8 percent after reporting stronger earnings than expected but weaker revenue.Several technical factors may have accelerated the recent swoon for markets, beyond weak American hiring data and other dispiriting economic reports, in what strategists at Barclays called “a perfect storm” for causing extreme market moves. One is centered at Tokyo, where a favorite trade for hedge funds and other investors began unraveling last week after the Bank of Japan made borrowing more expensive by raising interest rates above virtually zero.That scrambled trades where investors had borrowed Japanese yen at low cost and invested it elsewhere around the world. The resulting exits from those investments may have helped accelerate the declines for markets around the world.Japan’s Nikkei 225 jumped 10.2 percent Tuesday to claw back much of its 12.4 percent sell-off the day before, which was its worst since the Black Monday crash of 1987. Stocks at Tokyo rebounded as the value of the Japanese yen stabilized against the dollar following several days of sharp gains.Associated Press

Wall Street Rallies To Bounce Back From Its Worst Day in Nearly 2 Years, as Japanese Stocks Rebound

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