BeatenDown Reopening Trade Drives Stock Rebound

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The rally in stocks regained traction as speculation that the Federal Reserve will tighten policy at a gradual pace outweighed concern about the central banks hawkish pivot. Treasuries dropped.

A relative sense of calm returned to markets, with risk assets rebounding after last weeks selloff and a jittery session in Asia. Energy, financial and industrial stocks drove gains in the SP 500, while highflying tech companies underperformed. A gauge of small caps climbed about 2. Amazon.com Inc. fell as the online retail giant kicked off its Prime Day sale, with merchants curbing discounts amid rising shipping costs. Bitcoin sank as China intensified its cryptocurrency crackdown.

Traders remained focused on appearances by Fed officials for guidance on their massive bondbuying program. Dallas Fed President Robert Kaplan said he favors starting the process of reducing the central banks ongoing purchases sooner rather than later, while his counterpart from St. Louis James Bullard called it appropriate that policy makers last week opened the taper debate.

Fed Chair Jerome Powell testifies at a House Subcommittee hearing on the Feds pandemic emergency lending and its asset purchase programs TuesdayBank of England interest rate decision Thursday

Stocks

The SP 500 rose 1.3 as of 227 p.m. New York timeThe Nasdaq 100 rose 0.7The Dow Jones Industrial Average rose 1.7The MSCI World index rose 0.7

Currencies

The Bloomberg Dollar Spot Index fell 0.4The euro rose 0.4 to 1.1912The…

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