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Market Snapshot: Dow, S&P 500 pivot higher Wednesday as stock market faces early bout of turbulence

U.S. stocks were whipsawing early Wednesday, with the Dow industrials and the S&P500 index turning higher, as investors parsed economic data. Meanwhile, fresh reports out of China suggest that the world’s second-largest economy is struggling in its attempt to recover from the pandemic.

How are stock futures trading?
  • The Dow Jones Industrial Average
    DJIA,
    +0.25%

    climbed 121 points, or 0.3%, at 34,692.
  • The S&P 500 index
    SPX,
    +0.16%

    traded 11 points, or 0.3%, higher to reach 4,454.
  • The Nasdaq Compoisite Index
    COMP,
    -0.25%

    retreated 2 points, or less than 0.1%, to 15,034.

On Tuesday, the Dow industrials dropped 292.06 points, or 0.8%, to finish at 34,577.57, the S&P 500 index fell 25.68 points, or 0.6%, to 4,443.05 and the Nasdaq Composite fell 67.82 points, or 0.5%, to 15,037.76.

Read: Stock-market traders brace for ‘quadruple witching’

And: The S&P 500 fights to hold above a short-term line in the sand of bullish momentum

What’s driving the market?

Stocks were bucking higher in early, choppy trade as Wall Street as investors remain wary about the fallout from the COVID pandemic, which is threatening to slow global economic growth, as the delta variant has fueled surging cases in the U.S. and other countries.

Markets have been trying to regroup after a string of losses that were briefly halted on Monday.

The Dow and S&P 500 have lost ground for six of the last seven days and the Nasdaq has posted five straight days of losses. For September, the Dow is off by more than 2% and the S&P 500 is down about 1.8%.

Read: Shop early and expect to pay more: Supply chain issues could be a stumbling block to upbeat holiday shopping forecasts

“I suspect the market is likely to bounce around as it tries to stabilize. From a near term prospective the market is somewhat oversold, therefore we could get a bounce. However the cautious attitude will likely prevail since the decline has been accompanied by low volume,” Peter Cardillo, chief market economist at Spartan Capital Securities, said in emailed comments.

Meanwhile, the New York Fed’s Empire State business conditions index surged 16 points to 34.3 in September, the regional Fed bank said Wednesday. Economists had expected a reading of 17.2, according to a survey by The Wall Street Journal. The index stood at 18.3 in August. Any reading above zero indicates improving conditions.

Separately, the import price index dropped 0.3% last month, the government said Wednesday, marking the first decline in 10 months. The drop was mostly attributed to the lower cost of foreign oil and industrial supplies.

Meanwhile, data on U.S. industrial production showed a 0.4% rise in August after a 0.8% gain in the prior month, the Federal Reserve reported Wednesday. The gain is below economist expectations of a 0.5%, according to a survey by The Wall Street Journal.

Overnight news saw a batch of downbeat data from China, where August retail sales grew a disappointing 2.5% from a year earlier, from 8.5% growth in July. Industrial output in August and fixed-asset investment also fell short of expectations.

China’s zero-tolerance approach to controlling Covid-19 is posing difficulties for retailers and industry with relatively small outbreaks in the Fujian province this week provoking further lockdowns affecting millions.

On top of that, reports about the financial health of China Evergrande Group, which said that is facing “tremendous” liquidity strains and that it has hired advisers for what could be one of the country’s largest-ever debt restructurings, according to Bloomberg News, is being watched by market participants.

Which companies are in focus?
How are other assets trading?
  • The yield on the 10-year Treasury note
    TMUBMUSD10Y,
    1.288%

    fell 1 basis point to 1.273%. Yields and debt prices move in opposite directions.
  • The ICE U.S. Dollar Index
    DXY,
    -0.17%
    ,
    which measures the currency against a basket of six major rivals, fell 0.1% to 92.49.
  • Oil futures were higher, with the U.S. benchmark
    CL00,
    +3.01%

    rising 2.1% to $71.96 a barrel. October natural gas
    NGV21,
    +5.80%

    climbed 4.3% to $5.48 per million British thermal units.
  • In European equities, the Stoxx Europe 600 index
    SXXP,
    -0.41%

    fell 0.4%, while London’s FTSE 100 index
    UKX,
    +0.08%

    was flat.

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