After starting on the defensive once again on further fallout from weakness in global equities markets, Wall Street reversed course near the mid-point of Wednesday’s trading session, as major market averages shot to their highs on the session.
The S&P 500 Index (GSPC), which dipped about 1% lower at its quickly realized lows early in the trading session,wiped out the early deficit.Worries about the persistent weakness inAsian markets influenced the early trading, as stocks followed the lead ofChina, where the Shanghai Composite lost more than 4% Wednesday.
However, after the quick slump, somemeasure of bargain-hunting returned to the market. Bullish investors increasingly have become conditioned to step in whenever the market pulls back, regardless of the modesty of the relative attractiveness of the new entry point. But everytime the bulls step up, the bears are forced to cover short positions, adding to the volatility of the underlying market.
Some mediaaccounts also suggested that talk of a second roundof of stimulus spending has helped mobilize some of the animal spirits on Wall Street. Though, given that the majority of the stimulus capital in the first spending initiative hasn’t been put to work yet, there’s little reason to put much stake in talk of another bill.
Nevertheless, the S&P 500 has improved by about 8 points intraday, and while it hasn’t quite gotten back to the 1000-point mark, it has flirted with short-term technical resistance at about 998.