The stock market showed its tenacity, rebounding sharply even as many elements of the macroeconomic and geopolitical picture remain clouded, at best. Oil prices soared above $110 per barrel, helping the energy sector but raising questions for industries that rely on energy products for manufacturing and production.
Even with those crosscurrents, the Dow Jones Industrial Average (^DJI 0.56%), S&P 500 (^GSPC -0.88%), and Nasdaq Composite (^IXIC -2.05%) all managed to move higher by more than 1.5%.
|
Index |
Daily Percentage Change |
Daily Point Change |
|---|---|---|
|
Dow |
+1.79% |
+596 |
|
S&P 500 |
+1.86% |
+80 |
|
Nasdaq |
+1.62% |
+220 |
Data source: Yahoo! Finance.
A couple of stocks that had seen sharp pullbacks in recent days got some much-needed relief. EPAM Systems (EPAM -0.51%) and Las Vegas Sands (LVS -0.92%) were among the top movers on the day. Although both companies still face key questions, it appears that shareholders are starting to regain confidence in the two businesses' long-term prospects.
EPAM gets a vote of confidence
Shares of EPAM Systems rose more than 16% on Wednesday. The move follows a huge drop of more than 45% on Monday, as the tech-consulting company, with roots in the eastern European nation of Belarus, has had to deal with direct impacts from the war in Ukraine.
EPAM Systems has its headquarters in Pennsylvania, but co-founder/CEO Arkadiy Dobkin hails from Minsk, and much of the software-development work that the company does relies on coding professionals who live in Belarus, Ukraine, and Russia. In the nearly three decades since the founding of the company, access to eastern European coding talent has given EPAM an advantage in costs, compared to many areas of the world, and in quality over other popular outsourcing destinations.
Monday's decline stemmed from the uncertainty of availability of EPAM's coding talent, with several stock analysts cutting their price targets or ratings on the stock. Yet by Tuesday, stock analysts at Stifel came to the company's defense, expressing continued bullishness about EPAM's long-term prospects and arguing that the huge drop in the stock price offered an interesting opportunity.
That said, EPAM has faced some dissension within its own ranks on how it has tried to address the war in Ukraine in a way that doesn't alienate at least a portion of its workforce. Although Dobkin can't claim complete success on that front, investors appear ready to give EPAM the benefit of the doubt, at least for now.
A winning bet for Sands
Shares of Las Vegas Sands were up 10% on Wednesday. The move came from rumblings of possible positive news from the Asian gambling capital of Macao, and other stocks with exposure to the former Portuguese colony also saw strong gains.
Image source: Getty Images.
Sands and its peers have had to deal with aggressive restrictions from China during the COVID-19 pandemic, with the nation's drive to completely eliminate the disease within its borders leading to much tighter restrictions than in most other areas of the world. That's been bad news for casino traffic, with February 2022 casino revenue off almost 70% from pre-pandemic levels three years earlier.
Now, however, it appears that China is trying to figure out a pathway to end lockdowns and get economic activity back to normal. That would be an unquestionable positive for Sands and other casino operators.
Just as we've seen pent-up demand in other areas of the consumer economy, it's likely that gamblers and tourists will flock to Macao once they have the opportunity. Sands shareholders certainly hope that proves to be the case. Given the big casino stock move today, it seems like there's sentiment that the sooner it happens, the better for everyone.
