After tumbling for two straight days amid investor fears of Federal Reserve tightening, stock markets and financial sector stocks recovered some of the losses Feb. 6.
The S&P 500 was up 1.74% to close at 2,695.14, the Nasdaq Composite Index rose 2.13% to 7,115.88 and the Dow Jones Industrial Average added 2.33% to finish at 24,912.77. All three indexes, though, have yet to fully make up the losses that kicked off Feb. 2, when a report showing wages rising 2.9% year over year sparked fears from some investors that inflation showed clear signs of heating up — potentially forcing the Fed to hike rates quicker than expected.
St. Louis Fed President James Bullard struck a calming tone at a Feb. 6 event, saying the strong jobs report may not necessarily mean inflation will suddenly rise faster than expected. He also said the downturn over the past two days was predictable given that the stock market had been rising consistently for months without major drops.
Bankrate.com chief financial analyst Greg McBride described the day's moves, which included wild swings throughout the day in the major indexes, as a sign that the markets are going through a "run-of-the-mill market correction."
"This is how those corrections come to an end," he said. "Prices fall far enough that the bargain hunters come in and buy, pushing prices back up."
The SNL U.S. Bank Index finished 1.57% higher at 630.25, while the SNL U.S. Thrift Index increased 0.47% to close at 930.73.
Among the Big Four banks, Bank of America Corp. was up 3.11% to $31.20, Citigroup Inc. gained 2.12% to $74.82 and JPMorgan Chase & Co. improved 3.04% to $112.11.
But Wells Fargo & Co. continued to slump following the Feb. 2 announcement from the Fed that Wells would be restricted from growing further until the regulator is satisfied with its internal governance and risk controls. Shares in Wells dropped 1.51% to finish at $57.28.
Major movers today included SVB Financial Group, which climbed 3.24% to $243.43; Texas Capital Bancshares Inc., which added 2.56% to $92.00; East West Bancorp Inc., which rose 2.43% to $64.03; and Boston Private Financial Holdings Inc., which improved 2.42% to $14.80.
S&P Dow Jones Indices and S&P Global Market Intelligence are owned by S&P Global Inc.
Market prices and index values are current as of the time of publication and are subject to change.
