October surprise? Stocks continue to sizzle this month
By Paul R. La Monica, CNN Business
October may be famous for historically horrifying stock market crashes like the ones in 1929, 1987 and 2008. But so far this month, there’s nothing for investors to be scared of on Wall Street. Stocks enjoyed another solid rally Monday, continuing a hot streak for the markets this month.
The Dow ended the day up about 420 points, or 1.3%. The Dow has now gained nearly 10% this month, rebounding from steep drops in August and September.
The blue chip industrials, which include Apple, Microsoft, Coca-Cola, McDonald’s, Disney and 25 other giants of the American economy, are still down about 13% this year, though.
But the market has rallied this month on hopes that the Federal Reserve may soon take a break from its series of aggressive rate hikes to fight inflation. More big rate increases are expected at the Fed’s next meeting on November 2 as well as in December. Still, some hope the Fed may pause hikes in 2023.
Mostly solid earnings for the third quarter are helping to prop up stocks as well.
The S&P 500 rose 1.2% Monday, and the Nasdaq gained about 0.9%, too. Both indexes are also sporting decent gains for October, with the Nasdaq up more than 3.5% and the S&P up almost 6%. The S&P and Nasdaq are each still down more than 20% in 2022, though, which means they are in a bear market.
The Nasdaq was in the green Monday despite the fact that shares of several top Chinese tech stocks trading in the United States were plunging due to fears of continued crackdowns by China now that Xi Jinping has cemented a third term as the nation’s leader.
E-commerce company Pinduoduo plunged more than 25%. Electric car companies Nio, Xpev and Li Auto all posted double-digit percentage losses. So did shares of top Chinese techs Alibaba, Baidu and Tencent.
US companies with significant exposure to the Chinese market were also hit hard and sat out the broader market rally.
Tesla fell 1.5%. Starbucks was down 5.5%. Fast food giant Yum! Brands was 2% lower while Yum China, which franchises the KFC, Pizza Hut and Taco Bell brands in China, plunged 14%.
Casino owners Wynn Resorts and Las Vegas Sands, which both have properties in the Chinese special administrative region of Macao, also tumbled.
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