Nasdaq builds on last week’s gains; S&P 500, Dow Fall First Week

US stocks closed mixed on Monday as they failed to sustain momentum from their first major rally of the year last week.

Technology with the Nasdaq Composite (^IXIC) rose 0.6%, an outlier on the session, although the index traded higher than the 2% previously seen. S&P 500 (^ GSPC) and the Dow Jones Industrial Average (^ DJI) each edged closer, falling 0.1% and 0.3%, respectively, after paring the day’s gains.

The US dollar continued its decline, while oil prices Gathered to start the week On optimism about demand as China reopens. West Texas Intermediate (WTI) crude futures, the US benchmark, rose 1.4% on Monday to trade below $75 a barrel.

Atlanta Federal Reserve President Rafael Bostick said in remarks to the U.S. Federal Reserve at the Atlanta Rotary Club on Monday. Raise the interest rate above 5% At the beginning of the second quarter, then keep them there “for a long time”.

“I’m not a pioneer,” he said. “I think we need to pause and hang in there and let the policy play out.”

Some of 2022’s biggest losers made Monday’s top higher. Megacaps including Apple (AAPL), Amazon (AMZN), and characters (GOOG, Google) were all closed more.

Tesla (D.S.L.A) was one of the biggest movers of the day, rallying nearly 6%. Beaten-down shares of Coinbase (currency) increased by 15.1%. Cathy Wood’s ARK Innovation ETF (ARKK) — the bellwether for speculative tech stocks and the largest holder of each of the aforementioned two names — rose 4.6%.

Retail stocks were in focus on Monday Many companies announce news Ahead of the main ICR conference this week.

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Lululemon (Lulu) warned Expect fourth-quarter gross margins to decline The company struggled with increased costs due to an inflation-related slowdown in consumer spending. Shares fell 9.3%.

Late Friday, Macy’s (M) also warned against sales growth, sending shares down 7.6% on Monday. Abercrombie & Fitch (ANF), instead, said its sales decline would be less than feared, sending shares up 8.8%.

Shares of Bed Bath & Beyond (PPPY), meanwhile, rose 23.7% in volatile trade – at A point is 75% higher — The embattled meme-stock retailer said bankruptcy is on the table after losing half its value last week. Bed Bath & Beyond is set to report earnings on Tuesday.

Ali Baba (Baba) shares rose about 3.2% on Monday, their sixth straight day of gains since the co-founder Jack Ma agreed to relinquish controlling rights fintech subsidiary Ant Group.

Investors look ahead to December’s consumer price index (CPI) on Thursday — the month’s most important economic release and Federal Reserve officials’ Jan. 31-Feb. 1 to deliver their next interest rate hike. Wall Street will also face the first batch of earnings of the upcoming reporting season from Wall Street’s megabanks over the weekend.

Three major US indices Friday roseCooling is triggered by signs of cool growth Latest Monthly Jobs Report. The S&P 500, Dow and Nasdaq all rose at least 2% in the previous session. For the week, the S&P 500 and Dow Jones Industrial Average each advanced roughly 1.5%, while the Nasdaq rose 1%.

Nonfarm payrolls rose 223,000 in December The unemployment rate fell to 3.5%. Figures show a persistent imbalance between labor supply and demand, but investors cheered the easing Wage pressures as an indicator The central bank may reconsider its ambitious rate hike path.

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“There is little doubt that the labor market will withstand longer rate hikes than many expected,” Mike Lowengard, head of model portfolio construction in Morgan Stanley’s global investment office, said in emailed comments. “Remember, however, that monetary policy operates in a recession, so this is not a time for a slowdown in hiring.”

“The Fed minutes made it clear that rates will remain high throughout 2023, so investors should prepare for a bumpy ride, especially as we get a glimpse of guidance in the coming weeks as we enter earnings season.”

Traders work on the trading floor of the New York Stock Exchange (NYSE) on January 5, 2023 in New York City, USA. REUTERS/Andrew Kelly

Monday officially kicks off the first week of fourth-quarter earnings season, according to JP Morgan (JPM), the largest consumer bank in the U.S., is paving the way for a lighter-than-usual period for corporate finances as companies struggle with pressures from inflation and higher interest rates.

Wall Street analysts have been steadily cutting earnings estimates for S&P 500 companies in the final months of 2022.

Last quarter, analysts cut EPS forecasts by an average 6.5% range from September 30 to December 31, according to data from FactSet Research. By comparison, per FactSet, the average downward revision of bottom-up EPS estimates per quarter has been 2.5% over the past five years, 3.3% over the past 10 years, and 3.8% over the past 20 years.

Alexandra Semenova is a Yahoo Finance reporter. Follow her on Twitter @alexandraandnyc

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