Wall Street still jumpy but markets recover lost ground

Irish shares gain €1.3bn as European bourses edge back up

US markets remained volatile on Wednesday as investors remained nervous in the wake of this week’s stock rout.

Irish shares gained €1.3 billion on Wednesday as European markets recovered ground.

The Dow Jones and S&P 500 fluctuated throughout the day, ending in negative territory with the Dow falling 19.42, or 0.08 per cent, to 24,893.35 and the S&P 500 dropping 13.48 to 2,681.66.

A sale of 10-year Treasuries also saw weak demand, pushing yields close to a four-year high.


US President Donald Trump, who has taken credit for a rising stock market as a measure of his own success, complained on Twitter on Wednesday that “good news” in the economy led to an abrupt decline in stock prices, his first comments about the stock market since its sharp drop earlier this week.

‘Big mistake’

In the early-morning tweet, Mr Trump lamented that in the “old days,” stocks would rise on good economic news, saying “Today, when good news is reported, the Stock Market goes down. Big mistake.”

There was some good news to reassure investors, however. The US senate reached a two-year funding deal, reducing the risk of another government shutdown this week, though it was unclear if the House of Representatives would back the deal. This week’s sell-offs have been prompted amid concerns about inflationary pressures in the US as the world’s largest economy continues to perform strongly.


The Iseq index of Irish shares gained 94.48 points or 1.42 per cent to 6,753.19 at the close of business on Wednesday, but was still trailing last weekend’s close of 6,885.23.

That translates as a €1.3 billion gain for shares on the Irish market, which closed with a total value of €94.447 billion.

However they were still collectively worth €1.8 billion less than the €96.294 billion at which they closed on Friday, the last trading day before this week’s rout began.

Traders in Dublin said it was “up, up, up” but cautioned that investors were acting on a belief that the previous two days’ sell-off had left stocks undervalued.

“People are looking for a buying opportunity and they see this as a buying opportunity,” said one.

He added that it was “impossible” to say if the recovery would be sustained.

Dealers noted that money from the US helped bolster European markets generally. The FTSE climbed 138.02 or 1.93 per cent to close at 7,279.42.

They pointed out that the recovery on this side of the Atlantic gained most of its momentum in the second half of the day as US fund managers began trading.

Markets across the globe tumbled on Monday as investors deserted shares following signs that US inflation could outstrip forecasts, risking a sharp rise in interest rates.

Barry O'Halloran

Barry O'Halloran

Barry O’Halloran covers energy, construction, insolvency, and gaming and betting, among other areas

Suzanne Lynch

Suzanne Lynch

Suzanne Lynch, a former Irish Times journalist, was Washington correspondent and, before that, Europe correspondent