Markets roared back to life on Tuesday after Dow rose more than 500 points to end in positive territory. Despite persistent volatility, the session brought an end to the sell-off which had persisted for two consecutive sessions. All the major benchmarks ended in the green. The market’s fear-gauge also subsided to finish lower.
The Dow Jones Industrial Average (DJI) increased 2.3%, to close at 24,912.77. Further, the S&P 500 rose 1.7% to close at 2,695.14. The tech-laden Nasdaq Composite Index closed at 7,115.88, gaining 2.1%. The fear-gauge CBOE Volatility Index (VIX) decreased 16.1% to close at 31.30. A total of more than 12.3 billion shares were traded on Tuesday — the highest volume of trade since the Presidential elections of November 2016.
Dow’s Roller Coaster Journey
The Dow experienced a near 1,000-point swing on Tuesday, to finally end 567 points higher. This rally in the blue-chip index was its best in terms of percentage gains since the Presidential elections of November 2016. Coincidentally, the Dow was down by as much as 567.01 points earlier in the session. This marked its session low for Tuesday. Following this, the Dow rose by 600.48 points over the rest of the trading session, fluctuating 1,167.49 points in the process.
DowDuPont Inc. (DWDP - Free Report) surged 6% and was the best performing component of the blue-chip index. On Monday, the Dow lost a staggering 1,175.21 points to close below 25,000, giving up all its gains for 2018. Following the decline, the Dow slipped into negative zone for the year. However, the blue-chip index roared back into positive territory following Tuesday’s stupendous gains.
What Did the other Major Benchmarks Do?
The S&P 500 amassed 46.2 points to end in the green. Of the 11 major sectors of the S&P 500, nine ended in the positive territory with materials and technology leading the gainers. The Materials Select Sector SPDR ETF (XLB) and the Technology Select Sector SPDR ETF (XLK) gained 3.2% and 2.8%, respectively.
Meanwhile, the Nasdaq gained 148.4 points to end in the green, following a rally in tech shares. Shares of tech behemoths such as Apple (AAPL - Free Report) , Microsoft (MSFT - Free Report) and Amazon (AMZN - Free Report) gained 4.2%, 3.8% and 3.8%, respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
VIX Frenzy Subsides Post the Equity Carnage
On Monday, the fear-gauge index VIX jumped 130.7% to settle at 39.94, its highest level since August 2015. However, the index mellowed down faster than expected, falling as low as 22.78 during Tuesday’s session. However, earlier in the session, the VIX surged past 50 to hit its highest ever level since the devaluation of the Chinese Yuan in 2015.
Such fluctuations in VIX have arisen due to investors rotating out of equities into bonds as stronger than expected jobs data have given rise to faster than expected rate hikes. Moreover, the Fed expects the inflation levels to meet its target rate by this year. Such a scenario reversed on Tuesday after an influx of money into equities.
Stocks That Made Headlines
Spirit Airlines Q4 Earnings & Revenues Top, Stock Up
Shares of Spirit Airlines, Inc. (SAVE - Free Report) inched up at the close of business on Feb 6 following the earnings release for fourth-quarter 2017. (Read More)
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