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Tag: COMP

  • Dow tumbles over 400 points in final hour of trade as investors await monthly employment report

    Dow tumbles over 400 points in final hour of trade as investors await monthly employment report

    U.S. stocks extended losses in the final hour of trade on Thursday, while awaiting Friday’s February employment data that could help decide how large an interest rate hike the Federal Reserve will impose at its next meeting in two weeks.

    Financial sector stocks were particularly hard hit along with cryptocurrencies after Silvergate Capital Corp., collapsed overnight amid growing scrutiny in Washington. Other financial stocks fell, dragged down by SVB Financial Group, which fell by a record amount.

    How are stocks trading
    • The S&P 500
      SPX,
      -1.85%
      dropped 56 points, or 1.4%, to 3,936

    • Dow Jones Industrial Average
      DJIA,
      -1.66%
      was off 412 points, or 1.3%, to 32,387

    • Nasdaq Composite
      COMP,
      -2.05%
      declined by 174 points, or 1.5%, to 11,399

    Both the S&P 500 and Nasdaq finished higher on Wednesday, with only the Dow finishing in the red, while all three indexes remained on track for weekly losses. A weekly drop for the S&P 500 would mark its fourth such pullback in five weeks.

    What’s driving markets

    U.S. stocks trimmed earlier gains and extended losses on Thursday afternoon after trading modestly higher after the open when the latest weekly jobless claims data showed an unexpectedly large uptick in the number of Americans filing for unemployment benefits.

    The number of Americans who applied for unemployment benefits in early March jumped to a 10-week high of 211,000, the highest level since Christmas. That’s higher than the 195,000 new applicants that economists polled by the Wall Street Journal had anticipated.

    Economists said the data suggest that the labor market might be starting to slow, which is seen as a necessary prerequisite for driving inflation back to the Fed’s 2% target.

    “The labor market might just be on the cusp of an inflection point,” said Peter Boockvar, chief investment officer of Bleakley Financial Group, in emailed commentary.

    Investors are now looking ahead to Friday’s closely watched February jobs report from the Department of Labor. Economists polled by the Wall Street Journal expect 225,000 jobs were created last month after 517,000 new jobs were created in January, a number that was much higher than economists had anticipated.

    “If we do get the expected 200,000, or really anything between say 180,000 and 240,000, this would be a return to the prior trend and would signal that last month was indeed a one-off,” said Brad McMillan, chief investment officer of Commonwealth Financial Network, in emailed comments.

    “That would be perceived as a positive by the Fed and markets, suggesting that inflation may start moderating again but is still high enough to allow for continued economic growth.”

    See: Wall Street sees smaller 225,000 increase in U.S. jobs in February. A much larger gain might spur stiffer Fed rate hike.

    The Russell 2000
    RUT,
    -2.75%    ,
    the small-cap index, is on pace to close below its 50-day moving average for the first time since January 9, 2023, according to Dow Jones Market Data.

    Regional bank stocks underperformed on Thursday. Shares of Silicon Valley Bank parent company SVB Financial Group
    SIVB,
    -60.41%
    plummeted more than 61% after the company disclosed large losses from securities sales and a stock offering meant to provide a boost to its balance sheet. SVB is on pace to book the biggest one-day selloff since the dotcom boom, while its trading was halted for volatility multiple times, according to Dow Jones Market Data.

    Signature Bank 
    SBNY,
    -12.18%
     shares dropped 11.2%undefined

    The KBW Bank Index
    BKX,
    -7.70%
    of 24 leading banks slumped 7.1%, on pace for its worst day since June 26, 2020, according to Dow Jones Market Data. SPDR S&P Bank ETF
    KBE,
    -7.30%
    was down 6.5%.

    See: SVB Financial’s stock suffers biggest drop in 25 years after large losses on securities sales, equity offering

    Treasury yields fell with the yield on the 2-year note BX:TMUBMUSD02Yslipped to 4.885% from 5.064% on Wednesday. 

    Stocks suffered earlier in the week after Powell said during testimony on Capitol Hill that rates would likely need to rise even further than market participants had expected. However, the main indexes saw some relief after the Fed chief clarified that policymakers hadn’t yet decided on the size of the next rate hike.

    Investors have already digested several reports on the labor market this week, including a report on the number of job openings, which showed that the number of Americans quitting their jobs had fallen below 4 million in January for the first time in 19 months.

    “The big picture is that the labor market is easing, but it’s still tighter than it was before the pandemic,” said Sonu Varghese, a global macro strategist at Carson Group.

    See: Bad economic data won’t be good for stocks, but good data will be even worse, this JPMorgan technical strategist says

    Companies in focus

    — Jamie Chisholm contributed to this article

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  • U.S. stocks open higher as investors weigh data showing rise in weekly jobless claims

    U.S. stocks open higher as investors weigh data showing rise in weekly jobless claims

    U.S. stocks opened modestly higher Thursday as investors digested a report showing a weekly rise in jobless claims. The Dow Jones Industrial Average
    DJIA,
    +0.48%
    was up 0.4% soon after the opening bell, while the S&P 500
    SPX,
    +0.50%
    rose 0.2% and the technology-heavy Nasdaq Composite
    COMP,
    +0.57%
    gained less than 0.1%, according to FactSet data, at last check. The U.S. Department of Labor said Thursday that initial jobless claims rose by 21,000 to 211,000 during the week ending March 4. That was the highest total since late December. Investors have been watching the labor market for signs of potential weakening as the Federal Reserve keeps raising interest rates to cool the economy in its effort to combat high inflation.

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  • Dow falls slightly as U.S. stocks end mixed after Fed Chair Powell’s testimony

    Dow falls slightly as U.S. stocks end mixed after Fed Chair Powell’s testimony

    U.S. stocks closed mixed Wednesday, with the Dow Jones Industrial Average booking back-to-back losses after Federal Reserve Chair Jerome Powell’s second day of congressional testimony on monetary policy. The Dow
    DJIA,
    -0.18%
    ended 0.2% lower, while the S&P 500
    SPX,
    +0.14%
    rose 0.1% and the Nasdaq Composite
    COMP,
    +0.40%
    gained 0.4%, according to preliminary data from FactSet. Powell said Wednesday during testimony before the U.S. House Financial Services Committee that no decision has been made on the size of its interest rate hike at its policy meeting later this month. In his testimony Tuesday before the U.S. Senate Committee on Banking, Housing, and Urban Affairs, Powell had opened the door to potentially accelerating the pace of rate hikes.

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  • Asian shares follow Wall Street lower after stronger-than-expected data

    Asian shares follow Wall Street lower after stronger-than-expected data

    BANGKOK (AP) — Shares fell Monday in Asia after Wall Street benchmarks closed out their worst week since early December. U.S. futures edged higher while oil prices fell.

    Reports on inflation, the jobs market and retail spending have come in hotter than expected, leading analysts to raise forecasts for how high the Federal Reserve will have to take interest rates to slow the U.S. economy and cool inflation.

    Higher rates pressure business activity and investment prices. So far, they do not seem to be slowing growth as much as anticipated. The S&P 500 fell 1.1% Friday to cap its third straight loss.

    “It is becoming increasingly apparent that inflation, and associated inflation expectations and wage pressures, will not decline in a predictable linear manner,” Mizuho Bank said in a commentary. “Early trading on Monday suggests that risk aversion has been brought forward to Asian markets.”

    Tokyo’s Nikkei 225 index
    NIK,
    -0.11%
    edged 0.1% lower to 27,423 and the Kospi
    180721,
    -0.87%
    in Seoul gave up 0.8% to 2,402.

    In Hong Kong, the Hang Seng
    HSI,
    -0.26%
    lost 0.5% to 19,907 while the Shanghai Composite index
    SHCOMP,
    -0.28%
    was down 0.2% at 3,259. Australia’s S&P/ASX 200
    XJO,
    -1.12%
    shed 1.1% to 7,224.80.

    Bangkok was 0.3% lower while the Sensex in Mumbai dropped 0.7%.

    On Friday, the S&P 500
    SPX,
    -1.05%
    closed 1% lower at 3,970.04. The Dow Jones Industrial Average
    DJIA,
    -1.02%
    dropped 1% to 32,816.92, while the Nasdaq Composite
    COMP,
    -1.69%
    lost 1.7% to 11,394.94.

    Higher rates can drive down inflation, but they raise the risk of a recession.

    The measure of inflation preferred by the Fed, reported Friday, said prices were 4.7% higher in January than a year earlier, after ignoring costs for food and energy because they can swing more quickly than others. That was an acceleration from December’s inflation rate and was higher than economists’ expectations for 4.3%.

    It echoed other reports earlier in the month that showed inflation at both the consumer and wholesale levels was higher than expected in January.

    Other data Friday showed that consumer spending, the biggest piece of the economy, returned to growth in January, rising 1.8% from December. A separate reading on sentiment among consumers came in slightly stronger than earlier thought, while sales of new homes improved a bit more than expected.

    Such strength paired with the remarkably resilient job market raises the likelihood the economy might avoid a recession in the near term.

    Tech and high-growth stocks once again took the brunt of the pressure.

    Investments seen as the most expensive, riskiest or making their investors wait the longest for big growth are among the most vulnerable to higher rates.

    Traders are increasing bets on the Fed raising its benchmark rate to at least 5.25% and keeping it that high through the end of the year. It’s currently in a range of 4.50% to 4.75%, and it was at virtually zero a year ago.

    Expectations for a firmer Fed have caused yields in the Treasury market to shoot higher this month, and they climbed further Friday.

    The yield on the 10-year Treasury
    TMUBMUSD10Y,
    3.928%
    was steady at 3.94%, up from 3.89% late Thursday. It helps set rates for mortgages and other important loans. The two-year yield
    TMUBMUSD02Y,
    4.815%    ,
    which moves more on expectations for the Fed, rose to 4.79% from 4.71% and is near its highest level since 2007.

    In other trading Monday, U.S. benchmark crude oil
    CL.1,
    +0.20%
    lost 56 cents to $75.75 per barrel in electronic trading on the New York Mercantile Exchange. It gained 93 cents to $76.32 per barrel. Brent crude oil
    BRN00,
    +0.10%    ,
    the pricing basis for international trading, shed 65 cents to $82.51 per barrel.

    The dollar
    DXY,
    -0.12%
    rose to 136.41 Japanese yen
    USDJPY,
    -0.30%
    from 136.45 yen. The euro
    EURUSD,
    +0.12%
    slipped to $1.0533 from $1.0549.

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  • The 2023 stock market rally looks wobbly. What’s next as investors prepare for longer inflation fight.

    The 2023 stock market rally looks wobbly. What’s next as investors prepare for longer inflation fight.

    The stock market is ending February on a decidedly wobbly note, raising doubts about the durability of an early 2023 rally.

    Blame stronger-than-expected economic data and hotter-than-expected inflation readings that have forced investors to again rethink their expectations around how high the Federal Reserve will drive interest rates.

    “The idea that equity markets would experience a strong upside surge while the Fed was still hiking and the market was underestimating what Fed was going to do” had looked “untenable,” said Lauren Goodwin, economist and portfolio strategist at New York Life Investments, in a phone interview.

    Market participants have come round to the Fed’s way of thinking. At the end of January, fed-funds futures reflected expectations the Fed’s benchmark interest rate would peak below 5% despite the central bank’s own forecast for a peak in the 5% to 5.25% range. Moreover, the market was forecasting the Fed would deliver more than one cut by year-end.

    That view began to shift after the release of a January jobs report on Feb. 3 that showed the U.S. economy added a much larger-than-expected 517,000 jobs and showed a drop in the unemployment rate to 3.4% — its lowest since 1969. Throw in hotter-than-expected January consumer and producer price index readings and Friday’s bounce in the core personal consumption expenditures price index, the Fed’s favored inflation measure, and the market’s outlook on rates looks much different.

    Participants now see the Fed raising rates above 5% and holding them there through at least year end. The question now is whether the Fed will bump up its forecast of where it expects rates to peak at its next policy meeting in March.

    That’s translated in a backup in Treasury yields and a pullback by stocks, with the S&P 500 down around 5% from its 2023 high set on Feb. 2, leaving it up 3.4% in the year to date through Friday.

    It isn’t just that investors are learning to live with the Fed’s expectation for rates, it’s that investors are realizing that bringing down inflation will be a “bumpy” process, said Michael Arone, chief investment strategist for the SPDR business at State Street Global Advisors, in a phone interview. After all, he noted, it took former Fed Chairman Paul Volcker two recessions in the early 1980s to finally crush a bout of runaway inflation.

    The run to the S&P 500’s Feb. 2 high was led by what some analysts derisively called a “dash for trash.” Last year’s biggest losers, including highly speculative shares of companies with no earnings, were among the leaders on the way back up. Those stocks suffered particularly last year as the Fed’s aggressive cadence of rate hikes sent Treasury yields up sharply. Higher bond yields make it harder to justify holding stocks whose valuations are based on earnings and cash flow projected far into the future.

    Inflation readings this month have all been hotter than expected, resulting in the “reversal of everything that was working” previously, Arone noted. The 10-year Treasury yield had fallen, the dollar was weakening, which means that highly speculative, volatile stocks are giving back leadership to companies that benefit from rising rates and inflation, he said.

    The energy sector was the sole winner among the S&P 500’s 11 sectors in the past week, while materials and consumer staples outperformed.

    The Dow Jones Industrial Average
    DJIA,
    -1.02%
    dropped 3% last week, leaving the blue-chip gauge down 1% so far in 2023, while the S&P 500
    SPX,
    -1.05%
    slid 2.7% and the tech-heavy Nasdaq Composite
    COMP,
    -1.69%
    dropped 1.7%. The Nasdaq trimmed its year-to-date gain to 8.9%.

    Goodwin sees scope for stocks to fall another 10% to 15% as the economy slides toward recession. She said that while earnings results showed bottom line results continue to hold up relatively well for tech and consumer discretionary sectors, top line revenues are decelerating — a troubling mismatch. Outside of the pandemic winners, companies are struggling to maintain profit margins, she noted.

    Indeed, margin trouble could be the next big worry, Arone said.

    Net margins are below the five-year average because businesses have reached a limit when it comes to passing on price increases customers.

    “My view is this will remain a headwind for the outlook for stocks and one that’s a bit under the radar,” he said. That might explain why sectors that still enjoy high margins or are able to increase margins — such as the aforementioned energy and industrials — were outperforming the market at the end of the past week.

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  • Tesla’s Investor Event Is Coming. What Can Move the Stock.

    Tesla’s Investor Event Is Coming. What Can Move the Stock.



    Tesla


    needs a lower-priced car. And the sooner the better.

    The electric-vehicle pioneer’s 2023 investor event is coming up on March 1. It’s a chance for investors to hear from CEO Elon Musk about the company’s strategy and future. This year, as EV competition ramps up, one issue looms larger than others.

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  • Why is the stock market falling? Blame a ‘perfect storm’ as yields rise, dollar rallies

    Why is the stock market falling? Blame a ‘perfect storm’ as yields rise, dollar rallies

    Rising Treasury yields appeared Tuesday to finally catch up with a previously resilient stock market, putting major indexes on track for their worst day so far of 2023.

    “Yields are popping across the curve, with the 2-year back to its November highs. This time it seems, market rates are playing catch up with fed funds,” said veteran technical analyst Mark Arbeter, president of Arbeter Investments, in a note.

    Since the beginning of the month, traders in fed-funds futures have priced in a more aggressive Federal Reserve after initially doubting the central bank would hit its forecast for a peak fed-funds rate above 5%. A few traders are even pricing in the outside possibility of a peak rate near 6%.

    Arbeter noted that markets generally lead fed-funds higher, not the other way around. Meanwhile, the U.S. dollar has also rallied, with the ICE U.S. Dollar Index adding 0.2% to a February bounce.

    Arbeter also noted that breadth indicators, a measure of how many stocks are participating in a rally, had previously deteriorated, with some measures reaching oversold levels.

    “Just another perfect storm against the equity markets in the short term,” he wrote.

    Rising yields can be a negative for stocks, increasing borrowing costs. More important, higher Treasury yields mean that the present value of future profits and cash flow are discounted more heavily. That can weigh heavily on tech and other so-called growth stocks whose valuations are based on earnings far into the future. Those stocks were pummeled heavily last year but have led gains in an early 2023 rally, remaining resilient through last week even as yields extended a bounce.

    Yields have been on the rise after a run of hotter-than-expected economic data, which have boosted expectations for Fed rate hikes. Weak guidance Tuesday from Home Depot Inc.
    HD,
    -7.09%
    and Walmart Inc.
    WMT,
    +0.59%
    also contributed to the tone.

    Home Depot sank 6.5%, and was the biggest lower on the Dow Jones Industrial Average
    DJIA,
    -2.06%    ,
    after the home-improvement retailer reported a surprise decline in fiscal fourth-quarter same-store sales, guided for a surprise drop in fiscal 2023 profit and earmarked an additional $1 billion to pay its associates more.

    “While Wall Street expects resilient consumers following last week’s robust retail sales report, Home Depot and Walmart are much more cautious,” said Jose Torres, senior economist at Interactive Brokers, in a note.

    “This morning’s data offers more mixed signals concerning consumer demand, but during a traditionally weak seasonal trading period, investors are shifting toward a glass half-empty view against the backdrop of a year that’s featured the exact opposite so far, a glass half-full perspective,” he wrote.

    The Dow remained down nearly 650 points, or 1.9%, while the S&P 500
    SPX,
    -2.00%
    slumped 1.9% to trade at 4,001 after earlier dipping below the 4,000 level for the first time since Jan. 25. The S&P 500 was on track for its biggest daily drop since December. The Nasdaq Composite
    COMP,
    -2.50%
    was down 2.4%.

    The losses left the Dow clinging to a 0.1% year-to-date gain, while the S&P 500 remains up more than 4% and the Nasdaq Composite has rallied over almost 10% so far this year.

    Arbeter identified a “very interesting cluster” of support just below the Tuesday low for the S&P 500, with the convergence of a pair of trend lines along with the index’s 50- and 200-day moving averages all near 3,970 (see chart below).


    Arbeter Investments LLC

    “If that zone does not represent the pullback lows, we have more trouble ahead,” he wrote.

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  • Lucid Offers $7,500 ‘EV Credit’ and the Stock Drops. It’s No Longer Beating Tesla Shares.

    Lucid Offers $7,500 ‘EV Credit’ and the Stock Drops. It’s No Longer Beating Tesla Shares.

    Electric vehicle maker


    Lucid


    was shut out of the government’s new purchase tax credits for consumers buying an EV. The company decided to do something about that.

    Investors aren’t so sure they like it. They are taking some profits after a run that had


    Lucid


    (ticker:LCID) stock outperforming


    Tesla


    (TSLA) shares.

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  • The stock-market rally survived a confusing week. Here’s what comes next.

    The stock-market rally survived a confusing week. Here’s what comes next.

    Despite a Friday stumble, stocks ended a turbulent week with another round of solid gains, keeping 2023’s young but robust stock-market rally very much alive.

    But a cloud of confusion also sets over the market, and it will eventually need to be resolved, strategists said.

    Stocks rose early in the week as traders continued to bet that the Federal Reserve won’t follow through on its forecast to push the federal funds rate to a peak above 5% and hold it there, instead looking for cuts by year-end. Fed chief Jerome Powell pushed back against that expectation again on Wednesday, but a nuanced answer to a question about loosening financial conditions and an acknowledgment that the “disinflationary process” had begun convinced traders they remained right about the rate path.

    On Friday, however, a blowout January jobs report, with the U.S. economy adding 517,000 jobs and the unemployment rate dropping to 3.4%, its lowest level since 1969, appeared to affirm Powell’s position.

    Stocks took a hit, even if they finished off session lows, with the Nasdaq Composite
    COMP,
    -1.59%
    booking a fifth straight weekly gain and the S&P 500
    SPX,
    -1.04%
    achieving back-to-back weekly wins. The Dow Jones Industrial Average
    DJIA,
    -0.38%
    suffered a 0.2% weekly fall.

    “It kind of leaves you shaking your head right now, doesn’t it?” asked Jim Baird, chief investment officer at Plante Moran Financial Advisors, in a phone interview.

    See: Jobs report tells markets what Fed chairman Powell tried to tell them

    Commentary: The blowout jobs report is actually three times stronger than it appears

    At some point in the coming months there will need to be “a reconciliation between what the markets think the Fed will do and what Powell says the Fed will do,” Baird said.

    The rally could continue for now, Baird said, but he argued it would be wise in the long run to take the Fed at face value. “I think the overall tone of risk taking in the market right now is a little bit too optimistic.”

    Money-market traders did react to Friday’s data. Fed funds futures on Friday afternoon reflected a 99.6% probability that the Fed would raise the target rate by 25 basis points to a range of 4.75% to 5% at the conclusion of its next policy meeting, on March 22, up from an 82.7% probability on Thursday, according to the CME FedWatch tool.

    For the Fed’s May meeting, the market reflected a 61.3% chance of another quarter-point rise to 5% to 5.25%, the level the Fed has signaled is its expected high-water-mark rate. On Thursday, it saw just a 30% chance of a quarter-point rise in May. But markets still look for a cut by year-end.

    Of course, one month’s data do not represent the end of the argument. But unless January’s labor-market strength turns out to be a blip, the hawks on the Fed are likely to dig in and keep rates higher for longer, said Yung-Yu Ma, chief investment strategist at BMO Wealth Management, in a phone interview.

    For markets, the lack of a resolution to the long-simmering disconnect with the Fed could lead to a period of consolidation after an admittedly impressive start to 2023, he said.

    Indeed, the momentum behind the market’s rally could be set to continue. It’s been led by tech and other growth stocks that were hammered in last year’s market rout. Market watchers detect a sense of “FOMO,” or fear of missing out, is driving what some have termed a tech-stock “meltup.”

    See: Tech stock ‘meltup’ puts Nasdaq-100 on verge of exiting bear market

    “The impressive equity rally to start the year has caught cautious institutional investors, hedge funds, and strategists off guard. While overbought conditions are obvious, the near-universal level of skepticism among institutions provides a contrarian degree of support for continued strength,” said Mark Hackett, chief of investment research at Nationwide, in a Friday note.

    And then there’s earnings season, which has so far seen results from around half of the S&P 500.

    Companies through Friday had reported lower earnings for the fourth quarter relative to the end of the previous week and relative to the end of the quarter.

    The blended earnings decline (a combination of actual results for companies that have reported and estimated results for companies that have yet to report) for the fourth quarter was 5.3% through Friday, compared with an earnings decline of 5.1% last week and an earnings decline of 3.3% at the end of the fourth quarter, according to FactSet. If earnings come out negative for the quarter, it would be the first year-over-year decline since the third quarter of 2020.

    When it comes to earnings, “there’s definitely been a mood of forgiveness in the market,” said BMO’s Ma.

    “I think the market just didn’t want to see a disastrous earnings season,” he said, noting expectations remain for weak earnings in the current quarter and next, with bulls looking into the second half of this year and even into 2024 to get on a better footing.

    For the market, the main driver will remain data on inflation and wage growth, Ma said.

    Mark Hulbert: Are we in a new bull market for stocks?

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  • Blinken’s trip to Beijing postponed after U.S. spots Chinese spy balloon

    Blinken’s trip to Beijing postponed after U.S. spots Chinese spy balloon

    The U.S. State Department has postponed Secretary of State Antony Blinken’s trip to Beijing after American officials said they had found a Chinese spy balloon above the continental U.S., according to multiple published reports. China’s Foreign Ministry said Friday that the balloon the U.S. suspects of conducting surveillance was a civilian “airship” used for research, mainly meteorological purposes.

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  • Nasdaq posts best daily gain since Nov., S&P 500 closes up 1.5%

    Nasdaq posts best daily gain since Nov., S&P 500 closes up 1.5%

    The Nasdaq posted its best day of gains since November on Thursday, as stock-market bulls cheered the Federal Reserve’s decision a day before to raise interest rates by a smaller 25 basis point increment and embraced hints that a pause in rate hikes could be coming in a few months. The S&P 500 index
    SPX,
    +1.47%
    rose about 1.5%, while the Nasdaq Composite Index
    COMP,
    +3.25%
    jumped 3.3%, its best daily percentage gain since Nov. 30, according to Dow Jones Market Index. Both stock-market gauges surged in the final moments of trade. On the flip side, the Dow Jones Industrial Average
    DJIA,
    -0.11%
    shed about 39 points, or 0.1%, ending near 34,053, after posting back-to-back gains this week.

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  • S&P 500, Nasdaq close sharply higher Wednesday after Fed keeps slowing pace of rate hikes

    S&P 500, Nasdaq close sharply higher Wednesday after Fed keeps slowing pace of rate hikes

    The S&P 500 and Nasdaq Composite closed sharply higher on Wednesday, erasing earlier losses, after the Federal Reserve increased its benchmark short-term rate by a smaller 25 basis point increment. The Dow Jones Industrial Average
    DJIA,
    +0.02%
    edged up by about 6 points, or less than 0.1%, ending near 34,092. But the S&P 500 index
    SPX,
    +1.05%
    gained 1.1% and the Nasdaq Composite Index
    COMP,
    +2.00%
    posted a 2% climb, according to preliminary FactSet data. The Federal Reserve increased its policy rate to a 4.5% to 4.75% range, which followed six larger rate hikes in a row as the Fed continued its work to tame the worst stretch of inflation in 40 years. Bullish investors appeared to seize on Fed Chair Jerome Powell’s less aggressive tone on the path of future rate hikes, in an afternoon news conference, where he hinted that the U.S. central bank was likely to increase rates a couple more times, but then consider taking a breather. “We have no intention to overtighten,” Powell said.

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  • Nasdaq logs best January since 2001 as stocks climb to cap off stellar month

    Nasdaq logs best January since 2001 as stocks climb to cap off stellar month

    U.S. stocks finished in the green on Tuesday as the Nasdaq cemented its best January performance since 2001 amid a broad-based rally in equities that saw some of 2022’s worst performers take the lead. The S&P 500 SPX gained 58.83 points, or about 1.5%, to finish January at 4,076.60, a gain of 6.2% for the month, according to Dow Jones Market Data. That’s the large-cap index’s best monthly gain since October, and its best January since 2019, something that is also true for the Dow. The Nasdaq Composite COMP rose by 190.74 points, or 1.7%, to 11,584.55 on Tuesday, bringing its gain for January to 10.7%. January was also…

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  • U.S. stocks end lower, Dow snaps six-day win streak as Fed decision looms

    U.S. stocks end lower, Dow snaps six-day win streak as Fed decision looms

    U.S. stocks ended lower Monday, with the Dow Jones Industrial Average snapping a six-day win streak, as investors brace for the outcome of the Federal Reserve’s two-day policy meeting in a busy week for company earnings reports. The Dow
    DJIA,
    -0.77%
    closed 0.8% lower, while the S&P 500
    SPX,
    -1.30%
    fell 1.3% and the technology-laden Nasdaq Composite
    COMP,
    -1.96%
    dropped 2%, according to preliminary data from FactSet. The central bank’s meeting wraps up Wednesday, with Fed Chair Jerome Powell scheduled to host a press conference on its interest-rate decision that same day. Energy was the S&P 500’s worst-performing sector on Monday, followed by information technology.

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  • S&P 500 nears first ‘golden cross’ in 2.5 years, but this doesn’t guarantee more gains ahead

    S&P 500 nears first ‘golden cross’ in 2.5 years, but this doesn’t guarantee more gains ahead

    The S&P 500 is on the verge of achieving its first “golden cross” in two-and-a-half years, but that doesn’t mean stocks are destined for more gains over the coming year.

    The golden-cross indicator is used by technical analysts as a sign that a particular upward trend in markets or currencies is gaining momentum. Barring a massive selloff in stocks, the S&P 500’s 50-day moving average should cross its 200-day moving average in a matter of days.

    If it happens, it would mark the first such event since July, 2020, according to FactSet data. Data show it often does precede further gains for stocks over the following six months, or a year, but not always.

    The S&P 500 has seen 52 golden crosses since 1930, according to Dow Jones Market Data, which used back-tested data to account for the index’s performance prior to its creation in 1957. In that time, stocks were trading higher one year later 71% of the time.

    But there have been some notable exceptions during periods of heightened volatility.

    The S&P 500
    SPX,
    +0.25%
    declined during the 12 months that followed the golden cross that occurred on April 1, 2019, according to Dow Jones Market Data. This happened again in 1999 as the dot-com bubble burst, and also following a golden cross that occurred in1986, preceding the “Black Monday” crash.

    The Dow Jones Industrial Average
    DJIA,
    +0.08%
    achieved its most recent golden cross back in December and stocks have since moved higher.

    Technical analysts who spoke with MarketWatch said that while the golden cross can be a helpful sign that a given trend probably has more room to run, it helps to look for other signs as well.

    “The way we think about it is all big rallies start with a golden cross, but not all golden crosses lead to a big rally. It’s just one piece of the puzzle,” said Ari Wald, head of technical analysis at Oppenheimer.

    See: U.S. stocks flash rare bull-market signal for first time in nearly 3 years, but some have their doubts

    There have been some other encouraging signs that U.S. stocks could be headed for a lasting turnaround. One example Wald cited was the so-called advance-decline line, which recently reached a new cycle high.

    According to technical analysts, that’s a measure of market breadth which shows whether the major equity index’s gains are being powered by a broad range of stocks, or a handful.

    The advance-decline line hit 2.2 on Thursday, its highest level in nearly a year.

    The fact that cyclical sectors like technology and consumer discretionary are among the best performers since the start of the year is another encouraging sign, according to Wald.

    FactSet data show that communication services, consumer discretionary and information technology are the three best-performing sectors of the S&P 500 so far this year, with communications services up more than 15% since Jan. 1.

    However, with so much uncertainty about monetary policy and the macroeconomic outlook, some analysts doubt that the stock-market will simply return to business as usual so quickly, even as inflation has moderated over the past six months, taking some of the pressure off the Federal Reserve to continue to raise interest rates.

    One analysts warned that traders who are hungry for confirmation that the market sell-off of 2022 is indeed over should approach indicators like the golden cross with trepidation, despite its historical record.

    “In the past 20 years there have been more secular trends, and the golden crosses have worked,” said Will Tamplin, senior analyst at Fairlead Strategies. “But in an environment that’s a little more choppy, you can get the whipsaws. “

    The S&P 500 and SPDR S&P 500 exchange-traded fund
    SPY,
    +0.23%
    touched new intraday highs for the year on Friday, while the Nasdaq Composite
    COMP,
    +0.95%
    briefly traded at its highest level since September. The Dow Jones Industrial Average is on track for a weekly gain of more than 2.3%, what would be its best such performance since November.

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  • U.S. stocks open mostly lower as investors digest PCE inflation data

    U.S. stocks open mostly lower as investors digest PCE inflation data

    U.S. stocks opened mostly lower Friday as investors digested data from the Federal Reserve’s preferred gauge showing signs of inflation slowing while personal spending last month fell. The Dow Jones Industrial Average
    DJIA,
    +0.08%
    opened slightly higher before dipping soon after the bell, while the S&P 500
    SPX,
    +0.25%
    slipped 0.2% and the Nasdaq Composite
    COMP,
    +0.95%
    shed 0.3%, according to FactSet data, at last check. The Bureau of Economic Analysis released data Friday showing that the personal-consumption-expenditures index rose 0.1% in December for a rate of inflation of 5% over the past year. Inflation on a year-over-year basis slowed from 5.5% in November. So-called core PCE, which excludes food and energy prices, increased 4.4% in the year through December, compared with a 4.7% pace in the 12 months through November.

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  • S&P 500 ends at 7-week high on Thursday, stocks jump after U.S. economy posts 4th quarter growth

    S&P 500 ends at 7-week high on Thursday, stocks jump after U.S. economy posts 4th quarter growth

    Major U.S. stock indexes closed higher Thursday, with the S&P 500 ending at 7-week highs after the official scorecard of the American economy showed a strong 2.9% annual rate of growth for the fourth quarter of 2022. The Dow Jones Industrial Average
    DJIA,
    +0.61%
    rose about 204 points, or 0.6%, ending near 33,948, close to the session’s high. But the day’s bigger gains came from the S&P 500 index
    SPX,
    +1.10%
    and the Nasdaq Composite Index
    COMP,
    +1.76%    ,
    which gained 1.1% and 1.8%, respectively. The S&P 500 ended at its highest close since Dec. 2, according to preliminary FactSet data. The U.S. economy reported a robust quarterly gain to end the year on Thursday, which helped advance risk-taking on Wall Street, even though many economist still expect the U.S. to face tougher odds of avoiding a recession in 2023 as the Fed plans to keep increasing rates in the next few months, and to keep them high for some time as part of its inflation fight.

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  • U.S. stocks climb as GDP report shows economy taking Fed’s rate hikes in stride

    U.S. stocks climb as GDP report shows economy taking Fed’s rate hikes in stride

    U.S. stocks opened higher on Thursday as optimism over Tesla’s earnings results and a stronger-than-expected GDP report left investors in a better mood following Wednesday’s intraday selloff.

    How are stocks trading
    • The S&P 500
      SPX,
      +0.40%
      rose by 34 points, or 0.8%, to 4,049.

    • Dow Jones Industrial Average
      DJIA,
      +0.05%
      gained 145 points, or 0.4%, to 33,889.

    • Nasdaq Composite
      COMP,
      +0.89%
      advanced 174 points, or 1.5%, to 11,487.

    The Dow Jones Industrial Average finished Wednesday’s session up 10 points after falling roughly 400 points at the lows earlier in the session. The S&P 500 finished little-changed after erasing its early losses, while the Nasdaq ended lower.

    What’s driving markets

    Stocks opened higher after a flurry of economic data including a fourth quarter GDP report that came in stronger than expected, but the focus was on the latest batch of earnings, which helped to revive investors’ optimism following disappointing guidance from Microsoft Corp.
    MSFT,
    +1.35%
    earlier in the week.

    The economy grew at a robust 2.9% annual pace to close out 2022, according to the first estimate of fourth quarter GDP, released Thursday morning — the latest sign that the U.S. economy is holding up well despite the Federal Reserve’s aggressive interest-rate hikes.

    “Thursday’s GDP report suggests that the economy is relatively strong even in the face of aggressive measures by the Federal Reserve to calm inflation,” said Carol Schleif, chief investment officer, BMO Family Office, in emailed commentary.

    Stocks rose after the data were released as investors found solace in the latest signs that a soft landing for the U.S. economy — a scenario where growth slows, but a recession is avoided — remains possible, or even likely.

    “This is a bit of a relief rally,” said Christopher Zook, chairman and chief investment officer of CAZ Investments.

    However, corporate earnings and guidance are still the primary concern for investors, along with expectations about when the Federal Reserve will cut interest rates, Zook said.

    The labor market also showed signs of strength despite more reports of layoffs in the tech, finance and media spaces, as the number of Americans filing for unemployment benefits fell to their lowest level since April. Investors also digested durable goods orders for December. New home sales for December will be published at 10 a.m. ET.

    Investors also celebrated a surge in Tesla Inc.
    TSLA,
    +9.64%
    shares premarket after the firm released well-received results that showed record quarterly profits.

    Disappointing guidance from technology behemoth Microsoft had clobbered stocks on Wednesday as traders worried it signaled not just difficulties for the sector but also broadly worsening economic conditions.

    However, before the end of Wednesday’s session, Microsoft shares had recovered most of their 4.5% loss and the S&P 500 finished the session almost exactly where it began, according to data from FactSet.

    As for the Federal Reserve, the central bank is expected to slow the pace of interest rate hikes when it next week raises its policy rate by 25 basis points to a range of 4.5% to 4.75%.

    Companies announcing results on Thursday include: McDonald’s
    MCD,
    -0.28%    ,
    Intel
    INTC,
    -0.34%    ,
    Comcast
    CMCSA,
    +0.86%    ,
    Visa
    V,
    +0.15%    ,
    Dow
    DOW,
    -1.16%    ,
    Whirl pool
    WHR,
    -0.91%    ,
    Western Digital
    WDC,
    +3.72%
    and Northrop Grumman
    NOC,
    -0.90%    .

    Companies in focus

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  • Stocks finish lower, Dow clings to gains after latest batch of earnings

    Stocks finish lower, Dow clings to gains after latest batch of earnings

    U.S. stocks finished lower on Tuesday with only the Dow clinging to gains for the session as investors digested more earnings reports from major American firms. The S&P 500 SPX shed roughly 3 points, or 0.1%, to finish just shy of 4,017. The Nasdaq Composite COMP dropped by 30 points, or 0.3%, to roughly 11,334. The Dow Jones Industrial Average gained 104 points, or 0.3%, to finish at roughly 33,734. More earnings from major U.S. companies, including Microsoft Corp. MSFT are due out after the bell.

    …

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  • Stocks finish at highest level in a month as Nasdaq leads with 2% gain

    Stocks finish at highest level in a month as Nasdaq leads with 2% gain

    U.S. stocks finished at their highest level in a month on Monday as strong performances by consumer-technology giant Apple Inc.
    AAPL,
    +2.35%
    and chipmaker NVIDIA Inc.
    NVDA,
    +7.59%
    pushed the Nasdaq Composite
    COMP,
    +2.01%
    further into the lead. The Nasdaq gained roughly 223 points, or 2%, to finish at around 11,364, bringing the tech-heavy index’s year-to-date gain to 8.6%, according to FactSet data. The Dow Jones Industrial Average
    DJIA,
    +0.76%
    gained 254 points, or 0.8%, to close at roughly 33,630. The S&P 500
    SPX,
    +1.19%
    gained 47 points, or 1.2%, to 4,020. The Dow is up approximately 1.5% since the start of the year, while the S&P 500 is up roughly 4.7%. The tech-heavy Nasdaq has outperformed the other major U.S. indexes since the start of 2023, a reversal of the trend from 2022, when the value-heavy Dow outperformed the Nasdaq by the widest margin since 2000, according to Dow Jones Market Data. Investors await a batch of earnings from megacap technology stocks this week, including Microsoft Corp
    MSFT,
    +0.98%    .

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