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Stock Market News for Dec 13, 2021

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Wall Street maintained its northbound journey on Friday despite soaring inflation. Market participants ignored a record-high increase in general price levels as Omicron-led concerns subdued in past couple of weeks. All three major stock indexes ended in green. For the week also, these indexes finished in positive territories.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) gained 0.6% or 216.3 points to close at 35,970.99. Notably, 21 components of the 30-stock index ended in green while 9 in red. The blue-chip index is currently 1.7% below its all-time high recorded on Nov 8. The tech-heavy Nasdaq Composite finished at 15,630.60, advancing 0.7% or 113.23 points due to strong performance by large-cap technology stocks.

Meanwhile, the S&P 500 climbed 1% to end at 4,712.02, marking a fresh closing high. All eleven sectors of the benchmark index closed in positive territory. The Technology Select Sector SPDR (XLK) and the Consumer Staple Select Sector SPDR (XLP) rallied 2% and 1.7%, respectively.

The fear-gauge CBOE Volatility Index (VIX) was down 13.4% to 18.69. A total of 9.6  billion shares were traded on Friday, lower than the last 20-session average of 11.42 billion. Decliners outnumbered advancers on the NYSE by a 1.05-to-1 ratio. On Nasdaq, a 1.48-to-1 ratio favored declining issues.

Wall Street’s Bull Run Continues

Markets rebounded earlier this week after reports showed that the Omicron variant of the coronavirus was less severe than earlier thought. This lifted investors’ sentiment as they felt that the new mutant won’t impact the economic recovery much. This saw almost all the major indexes recover to near record levels last week.

Growth-oriented technology sector surged despite the possibility of a rise in market interest rate earlier-than-expectation. Technology-behemoths like Apple Inc. (AAPL - Free Report) , Microsoft Corp. (MSFT - Free Report) and Cisco Systems Inc. (CSCO - Free Report) surged 2.8%, 2.8% and 3%, respectively. All three stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Inflation At Record-High Level

The Department of Labor reported that consumer price index (CPI) – popularly known as household inflation – rose 0.8% in November compared with the consensus estimate of 0.7%. However, in October, CPI rose 0.9%. Year-over-year, CPI climbed 6.8%, marking its fastest monthly rise since June 1982. The consensus estimate was 6.7%. CPI rose 6.2% year over year in October.

Core CPI (excluding the volatile food and energy items) increased 0.5% in November, in line with the consensus estimate. In October, core CPI increased 0.6%. Year-over-year, core CPI advanced 4.9%, marking its fastest monthly rise since June 1991.

Other Economic Data

The University of Michigan reported that the preliminary data of the U.S. consumer sentiment index for December climbed 4.5% to a reading of 70.4 from November’s final reading of 67.4. The sub-index for current economic condition increased 1.4% to 74.6 in December and the sub-index for consumer expectations (what consumers are thinking about near future) jumped 6.8% to 67.8 in December.

Weekly Roundup

Last week was highly impressive for Wall Street. The Dow surged 4%, reflecting the index’s biggest weekly percentage gain since March. The blue-chip index snapped a four-week losing streak. The S&P 500 and the Nasdaq Composite appreciated 3.8% and 3.6%, respectively. Both indexes posted their biggest weekly percentage gain since February. Gradual fading out of Omicron-led concerns and systematic reopening of the U.S. and global economies resulted in Wall Street rally.


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