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Wall Street closed mixed on Monday after a choppy session. Market participants were considering a soft landing of the U.S, economy by the Fed. However, some Fed officials comments have dented investors sentiment. The Dow and the S&P 500 ended in negative territory while the Nasdaq Composite finished in green.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) dropped 0.3% or 112.96 points to close at 33,517.65. Notably, 15 components of the 30-stock index ended in positive territory while the remaining 15 in red. At its session high, the blue-chip index was up more than 305 points.
The tech-heavy Nasdaq Composite finished at 10,635.64, gaining 0.6% due to strong performance of large-cap technology stocks, especially the semiconductor stocks.
The S&P 500 fell 0.1% to end at 3,892.09. Six out of11 broad sectors of the benchmark index closed in negative territory while five ended in positive zone. The Consumer Staples Select Sector SPDR (XLP), the Health Care Select Sector SPDR (XLV) dropped 1% and 1.7%, respectively. On the other hand, the Technology Select Sector SPDR (XLK) rose 1.2%.
The fear-gauge CBOE Volatility Index (VIX) was up 4% to 21.97. A total of 11.35 billion shares were traded on Monday, higher than the last 20-session average of 10.90 billion. Advancers outnumbered decliners on the NYSE by a 1.85-to-1 ratio. On Nasdaq, a 1.48-to-1 ratio favored advancing issues.
Recent Positives
The Department of Labor reported that the nonfarm payroll increased 223,000 in December beating the consensus estimate of 208,000. However, December’s job additions fell below November’s data that were revised downward to 256,000 from 263,000 reported earlier.
Hourly wage rate increased 0.3% in December below the consensus estimate of 0.4%. November’s data was revised downward to 0.4% from 0.6% reported earlier. Year over year, the hourly wage rate increased 4.6% in December compared with the consensus estimate of 5%. The wage rate increased 4.8% year over year in November.
A large section of market participants believe that peak inflation has already achieved. Less-than-expected inflation rates in October and November with respect to several measures have clearly indicated this.
The Institute of Supply Management reported that the services sector index for December plummeted to 49.6% in December from 56.5% in November. The consensus estimate was 55.1%. Any reading below 50% indicates a contraction in services activities. The index contracted for the first time since May 2020, at the onset of the coronavirus pandemic.
A devastated housing market owing to the high mortgage rate, disappointing retail sales in December, the peak festive season, huge inventory accumulation by several retailers, a stiff fall in U.S. manufacturing activities, disappointing sales in December of electric vehicle giant Tesla Inc. (TSLA - Free Report) and a likely production cut by the global tech behemoth Apple Inc. (AAPL - Free Report) indicated that the U.S. economy is cooling in the desired direction of the Fed. Several U.S. corporate giants have started retrenching manpower significantly at higher level.
On Jan 9, in an interview with The Wall Street Journal, San Francisco Fed President Mary Daly said she expects the central bank to boost interest rates above 5% to get inflation down. Daly said “I think something above 5 is absolutely, in my judgment, going to be likely.” Moreover, Atlanta Fed President Raphael Bostic said he expects the benchmark lending rate to rise above 5% in order to combat a sticky inflation.
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Stock Market News for Jan 10, 2023
Wall Street closed mixed on Monday after a choppy session. Market participants were considering a soft landing of the U.S, economy by the Fed. However, some Fed officials comments have dented investors sentiment. The Dow and the S&P 500 ended in negative territory while the Nasdaq Composite finished in green.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) dropped 0.3% or 112.96 points to close at 33,517.65. Notably, 15 components of the 30-stock index ended in positive territory while the remaining 15 in red. At its session high, the blue-chip index was up more than 305 points.
The tech-heavy Nasdaq Composite finished at 10,635.64, gaining 0.6% due to strong performance of large-cap technology stocks, especially the semiconductor stocks.
The S&P 500 fell 0.1% to end at 3,892.09. Six out of11 broad sectors of the benchmark index closed in negative territory while five ended in positive zone. The Consumer Staples Select Sector SPDR (XLP), the Health Care Select Sector SPDR (XLV) dropped 1% and 1.7%, respectively. On the other hand, the Technology Select Sector SPDR (XLK) rose 1.2%.
The fear-gauge CBOE Volatility Index (VIX) was up 4% to 21.97. A total of 11.35 billion shares were traded on Monday, higher than the last 20-session average of 10.90 billion. Advancers outnumbered decliners on the NYSE by a 1.85-to-1 ratio. On Nasdaq, a 1.48-to-1 ratio favored advancing issues.
Recent Positives
The Department of Labor reported that the nonfarm payroll increased 223,000 in December beating the consensus estimate of 208,000. However, December’s job additions fell below November’s data that were revised downward to 256,000 from 263,000 reported earlier.
Hourly wage rate increased 0.3% in December below the consensus estimate of 0.4%. November’s data was revised downward to 0.4% from 0.6% reported earlier. Year over year, the hourly wage rate increased 4.6% in December compared with the consensus estimate of 5%. The wage rate increased 4.8% year over year in November.
A large section of market participants believe that peak inflation has already achieved. Less-than-expected inflation rates in October and November with respect to several measures have clearly indicated this.
The Institute of Supply Management reported that the services sector index for December plummeted to 49.6% in December from 56.5% in November. The consensus estimate was 55.1%. Any reading below 50% indicates a contraction in services activities. The index contracted for the first time since May 2020, at the onset of the coronavirus pandemic.
A devastated housing market owing to the high mortgage rate, disappointing retail sales in December, the peak festive season, huge inventory accumulation by several retailers, a stiff fall in U.S. manufacturing activities, disappointing sales in December of electric vehicle giant Tesla Inc. (TSLA - Free Report) and a likely production cut by the global tech behemoth Apple Inc. (AAPL - Free Report) indicated that the U.S. economy is cooling in the desired direction of the Fed. Several U.S. corporate giants have started retrenching manpower significantly at higher level.
Apple currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hawkish Comments From Fed Officials
On Jan 9, in an interview with The Wall Street Journal, San Francisco Fed President Mary Daly said she expects the central bank to boost interest rates above 5% to get inflation down. Daly said “I think something above 5 is absolutely, in my judgment, going to be likely.” Moreover, Atlanta Fed President Raphael Bostic said he expects the benchmark lending rate to rise above 5% in order to combat a sticky inflation.