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Tag: COMP

  • Dow ends up 105 points Tuesday, stocks post back-to-back gains as inflation data cools

    Dow ends up 105 points Tuesday, stocks post back-to-back gains as inflation data cools

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    U.S. stocks closed higher Tuesday in a choppy session, after a gauge of consumer prices showed inflation continued to retreat from its June peak. The Dow Jones Industrial Average
    DJIA,
    +0.30%
    rose about 105 points, or 0.3%, ending near 34,110, according to FactSet, after initially climbing about 700 points in early trade. The S&P 500 index
    SPX,
    +0.73%
    gained 0.7% and the Nasdaq Composite Index
    COMP,
    +1.01%
    advanced 1%. The latest consumer-price index for November showed annual inflation slowed to 7.1% from 7.7% a month before, adding to the retreat in the cost of living from a pandemic peak of 9.1% in June. Lower inflation, though still painfully high, gave more hope to investors that the Federal Reserve might be able to increase rates at a less dramatic pace than earlier in 2022, while potentially pausing at a “terminal,” or peak, rate that produces a soft-ish landing for the U.S. economy. Bond yields fell Tuesday after the inflation reading, with the 10-year Treasury rate tumbling 11.1 basis points to 3.5%, the biggest daily yield decline for the benchmark rate since Dec. 1, according to Dow Jones Market Data. The focus remains on Wednesday’s Fed rate decision, with expectations running high for a 50 basis point increase, a step down from the recent series of four 75 basis point hikes.

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  • Dow jumps more than 500 points as stocks end higher ahead of highly-anticipated inflation data

    Dow jumps more than 500 points as stocks end higher ahead of highly-anticipated inflation data

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    U.S. stocks closed sharply higher Monday, bouncing from last week’s losses ahead of a highly-anticipated reading on inflation for November. The Dow Jones Industrial Average
    DJIA,
    +1.58%
    ended up more than 500 points, or 1.6%, while the S&P 500
    SPX,
    +1.43%
    gained 1.4% and the Nasdaq Composite
    COMP,
    +1.26%
    advanced 1.3%, according to preliminary data from FactSet. Last week all three major benchmarks suffered losses, snapping a two-week win streak. Investors are awaiting fresh inflation data from the consumer-price index, with a CPI report scheduled to be released Tuesday morning ahead of the U.S. stock market’s open.

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  • The Stock Market Had a Terrible Week—and Now the Fed Meeting Is on Tap

    The Stock Market Had a Terrible Week—and Now the Fed Meeting Is on Tap

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    Things tend to slow down for the holidays. The stock market isn’t there yet.

    With Christmas just a couple of weeks away, it’s easy to look ahead to candy canes, caroling, and presents under the tree, but there’s still work to be done. The coming week certainly won’t be boring, with highly anticipated inflation data and a Federal Reserve decision on back-to-back days. The two events will do much to determine the direction of the market for the coming weeks—a deeper slide or a resumption of the Santa Claus rally.

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  • Stocks finish lower, Dow drops 300 points to cap off worst week in more than 2 months

    Stocks finish lower, Dow drops 300 points to cap off worst week in more than 2 months

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    U.S. stocks finished Friday’s choppy session with modest losses, capping off the worst week for stocks since September after a report on wholesale-price inflation challenged assumptions about slowing inflation in the U.S. The Dow Jones Industrial Average dropped 2.8% this week, its biggest pullback since at least the week ended Sept. 30, according to FactSet data. The blue-chip index finished Friday’s session
    DJIA,
    -0.90%
    down 305.02 points, or 0.9%, at 33,476.46. The S&P 500
    SPX,
    -0.73%
    shed 29.13 points, or 0.7%, to 3,934.38, capping off a weekly drop of 3.4%, its biggest pullback since September. The Nasdaq Composite
    COMP,
    -0.70%
    fell 77.39 points, or 0.7%, to 11,004.62.

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  • The Dow industrials are on the verge of a ‘golden cross,’ even as BlackRock predicts recession like no other

    The Dow industrials are on the verge of a ‘golden cross,’ even as BlackRock predicts recession like no other

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    Despite worries about inflation and an impending recession, there is at least one sign that some bullish market technical analysts might latch onto.

    An upbeat golden cross appears to be forming in the Dow Jones Industrial Average 
    DJIA,
    -0.90%    ,
     more than nine months after a bearish death cross formed back in March, as the hawkish agenda of the Federal Reserve shattered bullishness on Wall Street.

    A golden cross occurs when the 50-day moving average for an asset price trades above the 200-day MA, while a death cross, comparatively, is when the 50-day falls below the long-term average.

    The 50-day moving average for the Dow stands at 32,200.32, at last check Friday afternoon, while the 200-day sits at 32,460.71, a roughly 260-point difference that could be traversed in the coming week or two, based on its current trajectory.


    FactSet

    A golden cross would mark the first for the Dow industrials since 2020 of August, according to Dow Jones Market Data.

    The bullish chart formation also would appear at an odd time for investors, with an apparent uptrend materializing in the stock market, even as the threat of a recession in 2023 grows.

    Read: Financial markets are flashing a warning that a recession is imminent: here’s what it means for stocks

    See: Goldman Sachs CEO says recession is likely, with 35% chance of a soft landing

    BlackRock, the world’s largest asset manager, is anticipating a unique recession unlike others that we’ve seen in U.S. history.

    “The new macro regime is playing out. We think that requires a new, dynamic playbook based on views of market risk appetite and pricing of macro damage,” wrote BlackRock’s Investment Institute team led by Jean Boivin.

    The BlackRock team said markets aren’t necessarily pricing in the recession that is being predicted.

    “Central banks appear set on doing ‘whatever it takes’ to fight inflation, making recession foretold, in our view,” the team at BlackRock wrote.

    As MarketWatch’s Tomi Kilgore notes, crosses, overall, aren’t necessarily good market-timing indicators.

    Check out: MarketWatch’s live blog of the market

    On top of that, MarketWatch columnist Mark Hulbert concludes that the U.S. stock market on average has performed no better in the wake of a golden crosses as it did at other times.

    In many cases, a golden cross can help put an asset’s move into perspective, however, they tend to be well telegraphed.

    Interestingly, the recession is also being widely predicted and some don’t think investors are getting the memo. As BlackRock notes, investors aren’t reflecting the damage that is to come, particularly as earnings expectations from American companies are right-sized.

    So, it might be worth it for investors to take any golden crosses in assets with a grain of salt.

    So far, the Dow industrials have outperformed over the past three months, up about 5%, compared with a decline of 2.5% for the S&P 500
    SPX,
    -0.73%
    and an 8.2% drop for the Nasdaq Composite
    COMP,
    -0.70%    .

    Over the past three months, the Dow industrials have recent in aggregate on the back of gains in shares of Caterpillar
    CAT,
    -1.56%    ,
    Boeing Co.
    BA,
    +0.20%
    Merck & Co.
    MRK,
    -1.86%    ,
    IBM
    IBM,
    -0.47%
    and Travelers Cos.
    TRV,
    -1.10%    .

    For the year so far, the Dow is down 7%, while the S&P 500 is off 17% and the Nasdaq is down nearly 30%.

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  • U.S. stocks open lower, set for weekly drop after hotter-than-expected wholesale inflation report

    U.S. stocks open lower, set for weekly drop after hotter-than-expected wholesale inflation report

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    U.S. stock indexes opened lower on Friday after wholesale prices rose more than expected in November, dampening hopes that inflation might be cooling off. The Dow Jones Industrial Average
    DJIA,
    -0.90%
    lost 85 points, or 0.2%, to 33,717. The S&P 500
    SPX,
    -0.73%
    shed 0.2%, while the Nasdaq Composite
    COMP,
    -0.70%
    declined by 0.3%. Three major indexes are on pace to book a week of sizable losses with the S&P 500 approaching a weekly loss of 3.1%. Technology stocks have declined even more, with the Nasdaq Composite down 4% so far this week. U.S. wholesale prices rose 0.3% in November, the Labor Department said Friday. That topped the 0.2% gain expected by economists polled by Dow Jones. The core producer price index, which excludes volatile food, energy and trade prices, also rose 0.3% in November, up from a 0.2% gain in the prior month.

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  • S&P 500 snaps 5-session skid Thursday, stocks book solid gains

    S&P 500 snaps 5-session skid Thursday, stocks book solid gains

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    The S&P 500 ended a five-session slide on Thursday as major U.S. equity indexes booked a solid round of daily gains. The Dow Jones Industrial Average
    DJIA,
    +0.55%
    rose about 182 points, or 0.5%, closing near 33,780, while the S&P 500 index
    SPX,
    +0.75%
    gained 0.8% and the Nasdaq Composite Index
    COMP,
    +1.13%
    outperformed with a 1.1% advance, according to FactSet data. Investors were migrating back into stocks after weekly labor market data pointed to potential weakness, with businesses not hiring as many workers. A roaring labor market has been one of several factors keeping Wall Street on edge as the Federal Reserve has been trying to cool high inflation by sharply raising interest rates. Rising wages have threatened to throw a wrench in that effort, while also rekindling fears that the U.S. central bank might need to get even more aggressive than earlier anticipated with its rate hiking plans. Higher rates have weighed heavily on stocks and bonds in 2022, but could also threaten to tip the U.S. economy into a deeper recession than expected in the coming months. The 10-year Treasury rate rose 8.5 basis points to 3.492% on Thursday.

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  • U.S. stocks end mostly lower, with S&P 500 suffering longest losing streak since October

    U.S. stocks end mostly lower, with S&P 500 suffering longest losing streak since October

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    U.S. stocks closed mostly lower Wednesday, with the S&P 500 falling a fifth straight day as investors continued fearing a recession could be triggered by the Federal Reserve’s aggressive interest rate hikes as it fights high inflation. The Dow Jones Industrial Average
    DJIA,
    +0.00%
    closed about flat, while the S&P 500
    SPX,
    -0.19%
    fell 0.2% and the Nasdaq Composite
    COMP,
    -0.51%
    dropped 0.5%, preliminary data from FactSet show. The S&P 500 finished with its longest losing streak since October 12, according to Dow Jones Market Data. Of the S&P 500’s 11 sectors, only healthcare, consumer staples and real estate finished with gains.

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  • Does Tesla Have a Demand Issue? This Wall Street Analyst Thinks So.

    Does Tesla Have a Demand Issue? This Wall Street Analyst Thinks So.

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    Headwinds for


    Tesla


    —and its stock—appear to be growing. The latest may be among the biggest concerns of all for the company.

    Bernstein analyst Toni Sacconaghi wrote Tuesday that


    Tesla


    (ticker: TSLA) “increasingly appears to have a demand issue.”

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  • U.S. stocks waver in choppy trade, S&P 500 on pace for 5-day losing streak as economic growth worries linger

    U.S. stocks waver in choppy trade, S&P 500 on pace for 5-day losing streak as economic growth worries linger

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    U.S. stock indexes are wavering between small gains and losses on Wall Street Wednesday, struggling to gain ground after a four-day losing streak amid worries about the chances of an economic downturn in coming months.

    How are stock-index futures trading
    • S&P 500
      SPX,
      -0.16%
      dropped 14 points, or 0.3%, to 3,927

    • Dow Jones Industrial Average
      DJIA,
      +0.08%
      shed 70 points, or 0.2%, to 33,528, after rallying over 145 points earlier in the session

    • Nasdaq Composite
      COMP,
      -0.50%
      fell 83 points, or 0.8% to 10,931

    On Tuesday, the Dow Jones Industrial Average fell 351 points, or 1.03%, to 33596, the S&P 500 declined 58 points, or 1.44%, to 3,941, and the Nasdaq Composite dropped 225 points, or 2%, to 11,015.

    What’s driving markets

    A four-day losing streak, during which the S&P 500 index has lost 3.4%, showed little sign of being snapped Wednesday as investors continued to assess the potential economic damage inflicted by high inflation and the Federal Reserve’s campaign to damp it by raising interest rates. U.S. stock indexes extended losses in midday trade despite regaining some ground in the morning session.

    MarketWatch Live: S&P 500 on pace for 5-day losing streak as stocks turn negative heading into midday

    “The recent run of macro data points in the U.S. continues to underscore relatively solid economic trends. And combined with the recent easing in financial conditions, it may trigger a need for the Fed to push back in December. Put another way, the dove camp is feeling some pain,” said Stephen Innes, managing partner at SPI Asset Management.

    Jim Reid, strategist at Deutsche Bank , noted that the S&P 500 had now lost ground in the last seven out of eight sessions. “In fact, the latest moves for the S&P mean it’s now unwound the entirety of the rally following Fed Chair Powell’s [supposedly dovish] speech last week, which makes sense on one level given he didn’t actually say anything particularly new.”

    The S&P 500 has fallen 17.2% in 2022 as the Federal Reserve has driven borrowing costs sharply higher in an effort to tame inflation that has been running at the fastest pace in 40 years.

    See: BNP Paribas studied 100 years of market crashes — here’s what it says is coming next

    The Fed’s monetary tightening alongside stubborn inflation may deliver a marked economic slowdown, senior bankers such as JPMorgan’s Jamie Dimon and Goldman Sachs’s David Solomon warned this week.

    “Fears are growing that economies are in for a rough time ahead as feverish inflation and the bitter interest rate medicine being used to bring it down take effect,” said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.

    “Worries deepened amid warnings from U.S. banking and media sectors that navigating through the storm would not be easy, while the latest data has shown China’s trade has been sideswiped by a drop in global demand and zero-COVID policies. Despite today’s easing of restrictions it’s clear China’s COVID nightmare is not at an end,” Streeter added.

    China on Wednesday announced a series of measures rolling back some of its most draconian anti-COVID-19 restrictions. People who test positive for the virus will be able to isolate at home rather than in overcrowded and unsanitary field hospitals, and schools where there have been no outbreaks must return to in-class teaching, according to the National Health Commission.

    The Hang Seng index
    HSI,
    -3.22%
    in Hong Kong fell 3.2%, while the CSI 300
    000300,
    -0.25%
    dropped 0.2%, suggesting investors had already discounted Beijing’s more relaxed COVID stance.

    See: A speedy reversal of China COVID-19 restrictions could cause 1 million winter deaths: report

    However, long time bull Tom Lee, head of research at Fundstrat, reckons equities will benefit in coming weeks as investors start to get greater clarity on when the Fed may stop tightening policy.

    “We don’t think the end of the inflation war in 2022 is the Fed cutting rates. It is when Fed and markets see sufficient progress in inflation to remove the upside risks to higher rates. We think this could happen as early as the November CPI report. This will be released on 12/13,” Lee wrote in a note.

    “And if November CPI is soft, we think this will support a strong year-end rally. Admittedly, a 10% move between now and [year end] seems a stretch given the S&P 500 is around 4,000 but… the broader point is we see stocks having positive skew given the cautious positioning of investors and the possibility of very favorable incoming inflation reports,” Lee added.

    On the U.S. economic front, nonfarm productivity, which measures hourly output change per worker, rose at a 0.8% annualized rate last quarter, the Labor Department said on Wednesday. Unit labor costs, the price of labor per single unit of output, climbed by a smaller 2.4% annual pace in the third quarter, compared to the preliminary 3.5% increase.

    What companies are in focus

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  • $3,000 gold and more outrageous market predictions investors shouldn’t brush aside.

    $3,000 gold and more outrageous market predictions investors shouldn’t brush aside.

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    Monday served as another smackdown for investors who are banking on a Goldilocks economy and a less aggressive Fed.

    Some are now not ruling out a Grinch-like turn from the central bank — a 0.75% hike next week instead of the 0.50% markets have been pinning hopes on — following strong data on services, jobs and wages.

    It all goes along with the theme of 2022 — expect the unexpected. The relief of moving out of a crippling pandemic was quickly replaced by the biggest war on Europe’s shores in decades, that sparked worldwide inflation surges.

    What comes next is anyone’s guess and that brings us to our call of the day via Saxo Bank’s annual “Outrageous Predictions” for 2023.

    While some of these will sound crazy, note that the Saxo team, led by Chief Investment Officer Steen Jakobsen, have nailed a few wild prophecies in the past decade. Those include: a Brexit prediction in 2015, a 25% drop for the S&P 500 from its 2007 high in 2008, a tripling of Bitcoin’s value forecast in 2017.

    The focus for 2023’s prediction is that “a return to the disinflationary prepandemic dynamic is impossible because we have entered into a global war economy, with every major power across the world now scrambling to shore up their national security on all fronts; whether in an actual military sense, or due to profound supply-chain, energy and even financial insecurities that have been laid bare by the pandemic experience and Russia’s invasion of Ukraine,” says Jakobsen.

    As for those predictions, here we go:

    • Gold crosses $2,075 then rockets to $3,000 on unstoppable inflation. “Fed policy tightening and quantitative tightening drives a new snag in U.S. treasury markets that forces new sneaky ‘measures’ to contain Treasury market volatility that really amounts to new de facto quantitative easing,” says Saxo. And China’s end of zero-COVID drives up demand, commodity prices and inflation.

    • Widespread price controls to cap official inflation due to war economy mentality. “In 2023, expect broadening price and even wage controls, maybe even something like a new National Board for Prices and Incomes being established in the U.K. and the U.S.,” said Saxo. Market fallout? Fuel for gold’s
      GC00,
      +0.19%
      climb.

    • There’s a new reserve asset in town. Non U.S.-allied countries move away from the U.S. and IMF to create an “international clearing union (ICU) and a new reserve asset, called the Bancor (currency code KEY)” that borrows from economist John Maynard Keynes idea of resisting U.S. power over the international monetary system. Nonaligned central banks slash U.S. dollar reserves, Treasury yields soar and the dollar
      DXY,
      +0.09%
      drops 25% against a basket of currencies that trade with Bancor.

    • Japan pegs USDJPY to 200. Pressure intensifies on the already weak yen
      USDJPY,
      +0.04%
      into 2023 as currency intervention fails and inflation soars. The government resets the financial system, erasing all debt, recapitalizing banks, as trillions of yen return to Japan shores. But the yen still weakens by year-end.

    • A $10 trillion-dollar Manhattan project. A team of major tech leaders form a mega research-and-development effort for energy infrastructure and ground-breaking technologies — the Third Stone. Companies tied to the project soar in an overall weak environment for investing.

    • Tax haven ban kills private equity. The OECD launches a full ban on the biggest tax havens in the world in 2023 and in the U.S., carried interest tax as capital gains is shifted to ordinary income. It’s a body blow for private equity and venture capital — the valuation of publicly listed private-equity firms fall 50%.

    The rest of their predictions are here, such as the formation of an EU Armed Forces in 2023 and an “UnBrexit” referendum.

    Read: Why Monday’s stock-market rout should be a wake up call for investors

    The markets

    MarketWatch

    Stocks
    DJIA,
    -0.96%
     
    SPX,
    -1.40%
     
    COMP,
    -1.77%
    are drifting into the red, with Treasury yields
    TMUBMUSD10Y,
    3.571%
     
    TMUBMUSD02Y,
    4.395%
    steady, the dollar
    DXY,
    +0.09%
    lower and oil
    CL.1,
    -3.43%
     
    BRN00,
    -3.73%
    also down.

    For more market updates plus actionable trade ideas for stocks, options and crypto, subscribe to MarketDiem by Investor’s Business Daily.

    The buzz

    BioVie stock
    BIVI,
    -18.43%
    is climbing after positive results from the clinical-stage biopharmaceutical company on a drug for Parkinson’s and Alzheimer’s.

    NRG Energy
    NRG,
    -15.79%
    agreed to buy Vivint Smart Home
    VVNT,
    +32.31%
    in a $5.2 billion deal. Vivint shares are soaring.

    MEI Pharma
    MEIP,
    -33.52%
    shares are tumbing after drugmaker said it would stop developing cancer treatment zandelisib outside of Japan and announces job cuts. Herbalife shares
    HLF,
    -18.85%
    are down 10% after an offering of convertible notes 

    Powell Industries
    POWL,
    +19.11%
    stock is up 9% after the electrical equipment maker’s well-received results and new orders. Within software Sumo Logic
    SUMO,
    +11.65%
    and GitLab shares
    GTLB,
    +5.71%
    are surging on upbeat results and forecasts.

    Layoffs extending beyond tech? PepsiCo 
    PEP,
    -0.86%
    is reportedly cutting hundreds of workers at its North American headquarters.

    Home builder Toll Brothers
    TOL,
    -1.56%
    will report results after the close.

    The October trade deficit jumped 5.4% to $78,2 billion.

    The U.S. and EU are reportedly considering fresh steel and aluminum tariffs on China to fight carbon emissions.

    Best of the web

    “Nothing to be glad about.” An empty, lonely and cold formerly occupied Ukraine city.

    Morocco’s World Cup team leans on its secret weapon of parents in the stands.

    Why human composting could be the next big thing.

    The chart

    Headed into the holidays, consumers are using savings and credit, says a team of Jefferies analysts led by Corey Tarlowe. “The savings rate continues to trend lower and credit card balances are growing +15% Y/Y. We believe these trends indicate that the consumer is stretched.”

    Against this backdrop, they like Costco
    COST,
    -1.34%    ,
    Dollar General
    DG,
    -1.52%    ,
    Target
    TGT,
    +0.13%
    and Walmart
    WMT,
    -0.98%    .


    FactSet/Jefferies

    The tickers

    These were the top-searched tickers on MarketWatch at 6 a.m.:

    Ticker

    		 Security name
    TSLA,
    -2.00%         		Tesla
    GME,
    -5.32%         		GameStop
    AMC,
    -9.00%         		AMC Entertainment
    NIO,
    +2.37%         		NIO
    BBBY,
    -8.86%         		Bed Bath & Beyond
    AAPL,
    -1.83%         		Apple
    APE,
    -5.40%         		AMC Entertainment Holdings preferred shares
    COSM,
    -17.49%         		Cosmos
    AMZN,
    -2.26%         		Amazon.com
    MULN,
    -3.08%         		Mullen Automotive
    Random reads

    Tributes pour after “Cheers” star Kirstie Alley dies at 71.

    Happy 190th birthday to the world’s oldest tortoise.

    A green Grinchy dog for Christmas? Not everyone’s heart grew three sizes.

    Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.

    Listen to the Best New Ideas in Money podcast with MarketWatch reporter Charles Passy and economist Stephanie Kelton

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  • S&P 500, Nasdaq post worst day in month after strong data fuels worry about Fed rate hikes

    S&P 500, Nasdaq post worst day in month after strong data fuels worry about Fed rate hikes

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    The S&P 500 and Nasdaq Composite indexes recorded their worst day in almost a month on Monday, after a hotter-than-expected U.S. services-sector reading fueled concerns that the Federal Reserve may need to be even more aggressive in its inflation battle.

    How stocks traded
    • The Dow Jones Industrial Average
      DJIA,
      -0.26%
      finished down 482.78 points, or 1.4%, at 33,947.10.

    • The S&P 500
      SPX,
      -1.79%
      ended 72.86 points lower, or 1.8%, at 3,998.84.

    • The Nasdaq Composite
      COMP,
      -11.01%
      closed down 221.56 points, or 1.9%, at 11,239.94.

    • Those were the largest declines for the S&P 500 and Nasdaq Composite since Nov. 9, according to Dow Jones Market Data.

    Stocks finished mixed on Friday, although they clinched gains last week, following a robust November jobs report, which stoked fears that inflation might not be so easily defeated.

    What drove markets

    Strong wage growth numbers released Friday were followed up on Monday by a robust reading for the U.S. services sector — both of which helped to stoke fears that the Fed’s interest-rate hikes, along with the central bank’s modest balance-sheet unwind, haven’t had much of an impact on the tight labor market.

    The ISM barometer of U.S. business conditions in the service sector came in stronger than expected, rising to 56.5% in November, a healthy showing that signals the U.S. economy is still expanding at a steady pace.

    “If nothing else, the ISM services report is being interpreted as very strong, and thus the economy is overheating and that means more Fed tightening,” said Will Compernolle, a senior economist at FHN Financial in New York. “Consumer resilience has proven to be more intense than I would have expected. In the two most interest-rate sensitive sectors — housing and autos — tightening has channeled into markets in meaningful ways.”

    But there has been so much pent-up demand, that higher interest rates haven’t been cooling overall spending as much as the Fed would like because companies are still having to fill a backlog of orders, he said via phone.

    In other economic data, the final November S&P Global U.S. services PMI edged up to 46.2 from 46.1, but remained in contractionary territory.

    November jobs data released on Friday showed average hourly wages grew over the past year by more than 5% as of November, beating economists’ expectations and stoking concerns that robust wage growth would continue to fuel inflation, market strategists said.

    Worries about a more-aggressive Fed also helped to drive Treasury yields higher, adding to the pressure on stocks. The yield on the 10-year note rose 9.6 basis points to 3.6% on Monday. Treasury yields move inversely to prices, and yields had fallen sharply over the past month, driven by shifting expectations about the pace of Fed rate hikes.

    Monday’s ISM services figure “surprised to the upside, suggesting that the economy is still running above its long-run sustainable path and that the Fed is going to have to slow the economy more than expected in 2023,” Bill Adams, the Dallas-based chief economist for Comerica Inc. CMA, said via phone.

    In other markets news, signs that China’s government is easing its COVID restrictions helped Hong Kong’s Hang Seng Index
    HSI,
    +4.51%
    finish with a 4.5% gain.

    See also: Chinese ADRs and casino operators rally on signs of easing COVID

    Meanwhile, oil futures ended lower on Monday, a day after Sunday’s decision by OPEC and its allies to keep production quotas unchanged.

    Falling equity prices helped drive the CBOE Volatility Index
    VIX,
    +8.87%    ,
    also known as the VIX, back above 20 on Monday. The volatility gauge had fallen sharply in recent weeks as stocks rallied, potentially signaling complacency that could ultimately hurt stocks, said Jonathan Krinsky, chief market technician at BTIG, in a note to clients.

    Companies in focus

    ––Jamie Chisholm contributed reporting to this article.

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  • U.S. stocks book worst day in about a month after strong services data puts Fed hikes back in focus

    U.S. stocks book worst day in about a month after strong services data puts Fed hikes back in focus

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    U.S. stock indexes posted their worst day in nearly a month on Monday as hotter-than-expected reading on the U.S. services sector fueled speculation that the Federal Reserve will hike interest rates more aggressively to subdue inflation. The Dow Jones Industrial Average
    DJIA,
    -1.40%
    finished 482 points lower, or 1.4%, to 33,947. The S&P 500
    SPX,
    -1.79%
    dropped 1.8% to close below 4,000-level for the first time in nearly a week, while the Nasdaq Composite
    COMP,
    -1.93%
    slumped 1.9%. A barometer of U.S. business conditions at service-sector companies rose to 56.5% in November, a strong signal that the economy is still expanding at a steady pace but raising concerns that the central bank will continue hiking rate aggressively at its December 13-14 meeting. The yield on the 10-year note rose 9.6 basis points to 3.598% on Monday.

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  • Dow falls 550 points, S&P 500 breaks below 4,000 as stocks head for worst day in nearly a month

    Dow falls 550 points, S&P 500 breaks below 4,000 as stocks head for worst day in nearly a month

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    U.S. stocks are on track for their worst daily pullback in nearly a month on Monday as the S&P 500 traded below 4,000. Equity prices have been rattled by stronger-than-expected economic data, which market strategists say could inspire the Federal Reserve to hike interest-rates more aggressively. The S&P 500
    SPX,
    -1.79%
    fell 82 points, or 2%, to 3,988. The Dow Jones Industrial Average
    DJIA,
    -1.40%
    fell 540 points, or 1.6%, to 33,889. The Nasdaq Composite
    COMP,
    -1.93%
    fell 254 points, or 2.2%, to 11,206. All three indexes were on track for their worst day since at least Nov. 9, according to FactSet data. Meanwhile the Russell 2000
    RUT,
    -2.78%
    was down 55 points, or 2.9%, to 1,837, on track for its biggest drop since Nov. 2.

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  • The bear market rally is running out of stream, and it is time to take profits, says Morgan Stanley’s Wilson

    The bear market rally is running out of stream, and it is time to take profits, says Morgan Stanley’s Wilson

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    The stock market’s bounce off the October lows is running out of room, and it is time to take profits, according to Morgan Stanley’s Michael Wilson.

    The chief equity strategist who correctly predicted this year’s stock-market selloff, now expects the S&P 500
    SPX,
    -1.79%
    to resume declines from the beginning of the year, after the benchmark last week crossed above its 200-day moving average. 

    “This makes the risk-reward of playing for more upside quite poor at this point, and we are now sellers again,” a team of strategists led by Wilson wrote in a Monday note. 

    Wilson went from one of Wall Street’s most outspoken bears to a tactical bull in October, when he anticipated a December rally of U.S. equities with the S&P 500 reaching up to 4,150 points. However, as the large-cap index now trades near the bank’s original tactical target range of 4,000 to 4,150, the strategist said investors should consider taking profits and get prepared for the new bear-market lows. 

    Wilson also said in November the S&P 500 will set a new price trough of 3,000 to 3,300 in the first quarter of 2023, before jumping back to the 3,900-level by the end of the year. 

    See: This little-known but spot-on economic indicator says recession and lower stock prices are all but certain

    U.S. stocks fell on Monday after three major benchmarks on Friday posted a second straight week of gains. The S&P 500 on Monday was off 1.8%, ending at 3,998, while the Dow Jones Industrial Average
    DJIA,
    -1.40%
    declined by 1.4% and the Nasdaq Composite
    COMP,
    -1.93%
    slumped 1.9%. Stocks had soared last week after Federal Reserve Chairman Powell said the central bank’s pace of interest-rate increases can slow as soon as its December meeting.

    From a very short-term perspective, Wilson and his team think the S&P 500 could achieve 4,150, or about 3.8% above current levels, “over the next week or so.” However, a break of recent intraday lows of 3,938 would provide some confirmation the bear market is ready to reassert the downtrend in earnest, Wilson said.

    Morgan Stanley’s bearish call was echoed by other Wall Street banks. JP Morgan Chase & Co.’s Marko Kolanovic, once one of Wall Street’s most vocal bulls, called for equity prices to stumble early next year. He also argued that the rebound in stocks was overdone after October. Meanwhile, strategists at BofA Global Research said it is time to sell the stock-market rally ahead of a potential surge in the unemployment rate next year. 

    Wilson recommends investors stay defensive in healthcare, staples and utilities as falling rates from here should be viewed as “a growth negative rather than valuation/Fed pause positive.” In addition, growth stocks are unlikely to benefit from falling rates because of the risk to corporate earnings, especially for tech and consumer-oriented companies, which are large weights in growth indices.

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  • Dow tumbles 300 points, S&P 500 skids 1.3% as investors eye Fed response to strong U.S economic data

    Dow tumbles 300 points, S&P 500 skids 1.3% as investors eye Fed response to strong U.S economic data

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    U.S. stocks fell Monday to kick off a fresh week, with the S&P 500 and Nasdaq both down more than 1.2% heading into midday. The Dow Jones Industrial Average
    DJIA,
    -1.40%
    was down about 299 point, or 0.9%, trading near 34,134, while the S&P 500 index
    SPX,
    -1.79%
    was off 1.2% and the Nasdaq Composite Index
    COMP,
    -1.93%
    was 1.4% lower, according to FactSet. Stocks were lower on fears that the Federal Reserve might need to be more aggressive in 2023
    in tightening monetary policy than previously expected to tame high inflation, given that the U.S. economy has proven relatively resilient to the Fed’s aggressive pace of rate hikes already this year. The 10-year Treasury yield also was marching higher, up 7 basis points to about 3.58% on Monday, while the shorter 2-year Treasury rate was at 4.36%.

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  • U.S. stocks open lower as yields rise on hopes of China COVID policy relief

    U.S. stocks open lower as yields rise on hopes of China COVID policy relief

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    U.S. stock indexes opened lower on Monday as China began easing its COVID-19 restrictions in major cities, while investors awaited more economic data ahead of next week’s Federal Reserve policy meeting. The S&P 500
    SPX,
    -0.92%
    fell 0.6%, while the Dow Jones Industrial Average
    DJIA,
    -0.61%
    declined 0.7% and the Nasdaq Composite
    COMP,
    -0.91%
    shed 0.5%. The 10-year Treasury yield advanced to 3.550% from 3.502% on Friday. Several Chinese cities relaxed movement curbs and testing mandates over the weekend, raising hopes for a broader scaling back of the world’s most stringent anti-COVID controls. On Monday, commuters in Beijing and at least 16 other cities were allowed to board buses and subways without a virus test in the previous 48 hours for the first time in months. Shares of Chinese and Hong Kong stocks rallied on Monday, while the U.S.-traded Chinese stocks are on pace to book their biggest advance since at least March.

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  • Dow ekes out gain Friday, stocks book second week in a row of gains

    Dow ekes out gain Friday, stocks book second week in a row of gains

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    Major U.S. stock indexes ended a choppy session mixed Friday, while still posting weekly gains, after monthly jobs data showed the Federal Reserve’s rapid pace of interest rate hikes has yet to tame the roaring labor market. The Dow Jones Industrial Average
    DJIA,
    +0.10%
    rose about 33 points Friday, or 0.1%, ending near 34,428, after flipping between gains and losses. The S&P 500 index shed 0.1% and the Nasdaq Composite Index
    COMP,
    -0.18%
    lost 0.2%, according to FactSet. The main benchmarks still booked a second weekly advance in a row. The Dow rose 0.2% for the week, the S&P 500 gained 1.1% and the Nasdaq closed the week up 2.1%, according to FactSet. A hope that Federal Reserve officials might be able to raise rates at a slower pace in December has been feeding a more bullish tone in markets over the past two months, helping to significantly trimming year-to-date losses. But with the U.S. unemployment rate still low at 3.7% and wages rising in November, concerns resurfaced about the potential need for aggressive Fed actions to bring inflation down. Economists said Friday that could put another jumbo rate increase back on the table ahead of the holidays.

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  • Dow, S&P 500 finish lower Thursday, kick off final month of a brutal year on a down note

    Dow, S&P 500 finish lower Thursday, kick off final month of a brutal year on a down note

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    U.S. stocks finished mostly lower on Thursday, kicking off the final month of a brutal year for investors on a downbeat note. The Dow Jones Industrial Average
    DJIA,
    -0.56%
    fell about 194 points, or 0.6%, ending near 34,395. The S&P 500 index
    SPX,
    -0.09%
    fell 0.1%, while the Nasdaq Composite Index
    COMP,
    +0.13%
    rose 0.1%, according to FactSet. Stocks rallied sharply on Wednesday after Federal Reserve Chairman Jerome Powell indicated the central bank may soon downsize its pace or rate hikes after a series of jumbo increases of 75 basis points to the Fed’s policy rate. That has brought the benchmark rate to a range of 3.75% to 4%, its highest level in 15 years. But signs that U.S. inflation may be falling after being stuck near a 40-year high have encouraged Fed officials and investors, with the 10-year Treasury rate falling to 3.6% Thursday, its lowest yield in about two months, according to Dow Jones Market Data. The next big economic item for investors will be the release on Friday of October jobs data, which could help determine the size of the Fed’s next rate hike during its Dec. 13-14 Federal Open Market Committee meeting. The odds currently favor a 50 basis point increase.

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  • Dow, S&P 500 finish lower Thursday, kick off final month of a brutal year on a down note

    Dow, S&P 500 finish lower Thursday, kick off final month of a brutal year on a down note

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    U.S. stocks finished mostly lower on Thursday, kicking off the final month of a brutal year for investors on a downbeat note. The Dow Jones Industrial Average
    DJIA,
    -0.56%
    fell about 194 points, or 0.6%, ending near 34,395. The S&P 500 index
    SPX,
    -0.09%
    fell 0.1%, while the Nasdaq Composite Index
    COMP,
    +0.13%
    rose 0.1%, according to FactSet. Stocks rallied sharply on Wednesday after Federal Reserve Chairman Jerome Powell indicated the central bank may soon downsize its pace or rate hikes after a series of jumbo increases of 75 basis points to the Fed’s policy rate. That has brought the benchmark rate to a range of 3.75% to 4%, its highest level in 15 years. But signs that U.S. inflation may be falling after being stuck near a 40-year high have encouraged Fed officials and investors, with the 10-year Treasury rate falling to 3.6% Thursday, its lowest yield in about two months, according to Dow Jones Market Data. The next big economic item for investors will be the release on Friday of October jobs data, which could help determine the size of the Fed’s next rate hike during its Dec. 13-14 Federal Open Market Committee meeting. The odds currently favor a 50 basis point increase.

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