Stocks make sharp rebound after weak trading day

TradingPub Admin | April 16, 2013

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If you want a clear example of how stocks and other assets can make sharp fluctuations in short periods of time, the two trading sessions on April 15 and 16 illustrate how severe these changes can be. 

U.S. stocks had their worst decline of 2013 on April 15, according to USA Today. The S&P 500 Index plunged 2.3 percent, while the Dow Jones Industrial Average lost 1.8 percent. 

The day after, the benchmark S&P 500 staged a great rebound, surging 1.4 percent during the day to close at 1,574.57 at 4 p.m. in New York, the media outlet reports. The tech-heavy Nasdaq also displayed strong performance, spiking 1.5 percent during the session. The Dow enjoyed sharp appreciation, gaining 1 percent. 

Buyer resurgence
One potential factor that could be pushing equities higher is a resurgence of investors looking to purchase these securities, according to Bloomberg. 

"Over the last few weeks, every down move has been met with buyers that have come in," Brad Sorensen, director of market and sector analysis at San Francisco-based Charles Schwab Corp., told the news source by telephone. "People on the sidelines are waiting for a pullback to get into the market that they've missed for the past six months. We're seeing more of that today."

Housing data
Another factor that was cited by market experts as causing a rebound in global stock prices is strong housing data from the United States, as starts increased by 7 percent and rose above a crucial annual rate of 1 million units in March, according to USA Today.

This figure surpassed the median forecast of economists taking part in a Bloomberg poll, which predicted that these starts would total 930,000 during the month. In addition, Commerce Department data revealed that the figure for the prior period was revised upward to 968,000. 

Stocks overcome global growth
If you are looking for a sign that the sentiment surrounding U.S. stocks is strong, a great example is the the fact that these equities rose on April 16 even though the International Monetary Fund revised its global growth estimate downward, predicting that the economy will rise at a rate of 3.3 percent in 2013, compared to its previous projection of 3.5 percent, according to the news source. 

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