US stocks end higher after huge comeback from steep drop

NEW YORK - Wall Street stocks finished in positive territory Monday, staging a huge comeback ahead of a closely-watched Federal Reserve decision expected to signal imminent interest rate hikes.

Stocks were in the red most of the day, hitting their lowest point around midday and extending January's market weakness as investors readjust their holdings following Fed statements signaling a sharp pivot on monetary policy.

But prices turned around later in the afternoon.

The Dow Jones Industrial Average finished up 0.3 percent at 34,364.50, a gain of more 1,200 points from its lowest point in the day.

The broad-based S&P 500 also sore 0.3 percent to close at 4,410.13, while the tech-rich Nasdaq Composite Index advanced 0.6 percent to 13,855.13.

"There were signs of selling exhaustion," said Karl Haeling at LBBW, adding that it is too soon to know if markets have bottomed out.

"If the Fed comes out and sends a more hawkish message on Wednesday that could send things right back down," he said.

"On the other hand, there have been some extreme bearish forecasts on the Fed, so it's also possible that the Fed comes out hawkish but a little less than some of their statements lately, and the market could have a big bounce."

The session also was beset by worries over a possible Russian invasion of Ukraine, after the United States, Britain and Australia ordered diplomats' families to leave the capital Kyiv amid soaring tensions over Moscow's deployment of some 100,000 troops to its neighbor's borders.

Some analysts have questioned the sell-off over the last few days.

JPMorgan Chase analysts called the downturn "overdone," saying the trend is "out of line with activity momentum, easing bottlenecks, and what we expect to be a strong earnings season."

Among individual companies, Halliburton jumped 3.8 percent as it posted better-than-expected quarterly and annual revenue, buoyed by the soaring price of crude which is driving increased demand for its services to oil and gas operators.

Kohl's jumped 36 percent following reports activist funds had offered roughly $9 billion to acquire the department store chain.

AFP