Which stocks are on fire right now?
The market has been up about 30% since last week, as the Federal Reserve’s monetary policy has pushed up bond yields, which have soared as investors have been concerned about the impact of higher interest rates on corporate profits.
The Dow Jones Industrial Average is up almost 5%.
But the stock market has also been up significantly over the past week as investors and companies have been buying and selling stocks and holding them in a bid to protect their wealth.
The S&P 500 index of the nation’s largest companies, which includes tech giants like Facebook, Alphabet Inc., Twitter Inc. and Tesla Motors Inc., is up more than 8% and the Nasdaq Composite is up nearly 6%.
On Wednesday, the NasDAQ fell by 0.8% to 4,858.25.
The tech sector is up 1% and Wall Street is up 3.3%.
Investors have been pushing stocks to record highs to help them protect their investments.
The Fed has signaled that it will continue to tap the $85 billion in reserves it has stashed in the banks as it prepares to raise interest rates.
But that is not enough to spur the economy.
The markets have been hurt by concerns about the possibility that a slowdown in the U.S. economy will lead to a recession and an increase in unemployment, as well as fears that the Federal Housing Finance Agency will require new mortgage-backed securities to be backed by more of the economy’s housing wealth.
“People are concerned that the Fed is going to have to step in, but the Fed has a pretty broad set of tools to do what it wants,” said Michael Ferri, chief investment officer at Bancorp Financial Services in Stamford, Connecticut.
“We’re not seeing it in the market.”
In the meantime, investors have continued to hold onto their money and their investments, even as the stock markets have plunged.
“You’ve got a whole bunch of investors that are holding onto money,” said Mike Sacks, a portfolio manager at First Capital Management.
“There’s a lot of them out there.
We’re not getting them into the markets.”
The stock market is up this week because of what’s known as the “fundamental momentum” effect, which is when stocks go up because investors are buying them at a faster pace than the market is seeing.
But investors have also been buying back shares and holding onto them for fear of the stock price falling, said Mark Roth, a financial economist at the University of Delaware.
“The markets are down, the companies are down,” Roth said.
“If they were to go to a bear market, then stocks would probably go down and that would hurt the economy.”
This week, the S&s stock index has gained 6.4% in the past 24 hours, the best performance since July 24.
“What we’re seeing is investors who are buying stocks and keeping their money in stocks are being hurt by the bear market,” Roth told Business Insider.
Investors also are buying back their own shares, which may be helping to prop up the market.
“It’s good for the economy because when companies are going to go bankrupt, there’s less money to go around,” Sacks said.
It is also helping to push the stock indexes higher.
The index is up 11.2% this week.
“This is one of the best times for the market since we have a very, very low interest rate environment,” Roth added.