NEW YORK, Jan. 24 (Xinhua) -- U.S. stocks staged a dramatic comeback on Monday following a week-long losing spree and investors' buying of relatively cheap stocks.
The Dow Jones Industrial Average gained 99.13 points, or 0.29 percent, to 34,364.50. The S&P 500 grew 12.19 points, or 0.28 percent, to 4,410.13. The Nasdaq Composite Index picked up 86.21 points, or 0.63 percent, to 13,855.13.
Eight of the 11 primary S&P 500 sectors ended in green, with consumer discretionary and energy sectors led the gainers, up 1.21 percent and 0.55 percent, respectively. Utilities, health and consumer staple sectors lost 1.03 percent, 0.37 percent and 0.35 percent, respectively.
The Dow, S&P and Nasdaq sank as much as 3.25 percent, 3.99 percent and 4.9 percent around noon, respectively, due to concerns on geopolitical tensions and upcoming Fed monetary policy meeting.
The three indexes have suffered consecutive losses in the previous four sessions leaving market sentiment under grave pressures.
The Cboe Volatility Index, widely considered as the best fear gauge in the stock market, shot up to 38.94 points at one point but eased back to 29.9 points at the close of trading on Monday.
Both Chicago Fed National Activity Index for December 2021 and IHS Markit Flash U.S. Composite PMI for January 2022 saw material deterioration from the previous month.
In particular, U.S. preliminary composite output index fell to 50.8 in January, the lowest level since July 2020, as the Omicron wave exacerbates supply delays and labor shortages.
For much of the past decade, market volatility was calmed by the notion that the Federal Reserve and other global central banks stood ready to step in to support the economy in the event of weakness, exogenous shocks, or an unexpected tightening in global financial conditions, according to a research note by UBS on Monday.
"Today, with inflation still elevated, that support feels less certain, and this week's Fed meeting is likely to underscore the Fed's shift in policy priorities away from supporting growth and toward fighting inflation," said Mark Haefele, chief investment officer at UBS Global Wealth Management.
The Fed is scheduled to hold its monetary policy meeting on Tuesday and Wednesday with the wide expectation of more hawkish signals.
Earlier last week, Barry Bannister, head of institutional equity strategy with U.S. brokerage and investment banking firm Stifel, predicted that the S&P index would fall to 4,200 in the near term amid tighter U.S. financial conditions.
The S&P 500 recorded an intra-session low of 4,222.62 on Monday and entered the correction territory shortly.