United States stocks rose following positive earnings results after three days of brutal losses that sent the main benchmarks to their lowest levels in months, Craigs Investment Partners broker Chris Timms said.
However, he warned yesterday the worst might not be over as the S&P 500 closed at its lowest level since May 20 and fell below its 200-day moving average for the first time in nearly two years.
The breach of its moving average was significant because some market observers saw it as a bearish signal the market might be in store for further falls.
Investors welcomed better-than-expected earnings results from Citigroup and Johnson & Johnson, which outweighed downbeat German sentiment data hitting equities across Europe, he said.
But there was still concern the benchmark S&P had lost 6.6% since its September 18 record close and was now up only 1.6% for the year, while the Dow was down 1.6% since December 31.
''Today's action is typical of a market that hasn't completed its downward course. In order for this market to escape further declines, we would have to see the market begin to stabilise and not slip in and out of the plus and minus column consistently.''
The sell-off had been driven by a host of negative influences including the potential spread of Ebola, the effect of global economic weakness on US earnings and plunging oil prices, Mr Timms said.
