US stocks reverse sharp falls, fears of economic downturn “overblown”

Markets were mixed on Monday.

The S&P 500 reversed a sharp fall early in the session to finish 0.2 percent higher. However, the STOXX Europe 600 tumbled 1.9 percent and the Nikkei 225 plunged 2.1 percent.

“Higher volatility and wider intraday and intraweek ranges are likely par for the course these days and momentum can shift without an easily-defined reason,” said Liz Ann Sonders, chief investment strategist, at Charles Schwab & Co.

While the S&P 500 managed to rebound from lows on Monday, almost half of its component stocks are already in a bear market.

Still, Tom Essaye, president of the Sevens Report, said in a note that the majority of the news last week was “net positive”.

Gad Levanon, chief economist of North America at The Conference Board, said that fears of an economic downturn are “overblown” and “the stock market is overreacting”.

“The U.S. economy will gradually slow during 2019 but GDP growth will not drop below 2%,” he wrote.