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Wall Street closed mixed on Tuesday after a choppy trading session. The Dow and the S&P 500 ended in positive territory while the Nasdaq Composite finished in red following rise in government bond yields. U.S. stocks markets will remain close on Thursday to observe the Thanksgiving Day.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) gained 0.6% or 194.55 points to close at 35,813.80. Notably, 20 components of the 30-stock index ended in the green while 10 in red. However, the tech-heavy Nasdaq Composite finished at 15,775.14, dropping 0.5% due to weak performance by large-cap technology stocks.
Meanwhile, the S&P 500 rose 0.2% to end at 4,690.70. Eight out of eleven sectors of the benchmark index closed in positive territory and three in red. The Energy Select Sector SPDR (XLE), the Financials Select Sector SPDR (XLF) and the Real Estate Select Sector SPDR (XLRE) rallied 3.1%, 1.6% and 1.1%, respectively.
The fear-gauge CBOE Volatility Index (VIX) was up 1.1% to 19.38. A total of 11.3 billion shares were traded on Tuesday, higher than the last 20-session average of 11.1 billion. Decliners outnumbered advancers on the NYSE by a 1.27-to-1 ratio. On Nasdaq, a 1.39-to-1 ratio favored declining issues.
Spike in Government Bond Yields
Yields on U.S. government bonds continued to rise in the past two days once President Joe Biden renominated incumbent Fed Chairman Jerome Powell for a second-term over Fed Governor Lael Brainard, who has been appointed as vice-chair of the board of governors.
Market participants consider Brainard as more dovish than Powell and expects the pace of the tapering of the central bank’s monthly bond-buy program will increase under Powell’s Chairmanship and the first rate hike may take place in the first half of 2022.
On Nov 23, the yield on the benchmark 10-year U.S. Treasury note increased 4 basis points to 1.665% in afternoon trading while the yield on the 30-year U.S. Treasury bond rose 5.1 basis points to 2.023%.
As a result, shares of major banks like The Goldman Sachs Group Inc. (GS - Free Report) and JPMorgan Chase & Co. (JPM - Free Report) were up 2.6% and 2.4%, respectively. However, shares of technology giants like Alphabet Inc. (GOOGL - Free Report) and Meta Platforms Inc. fell 0.3% and 1.1%, respectively. Alphabet sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Powell Gets Second-Term as Fed Chair
On Nov 22, President Joe Biden has nominated incumbent Fed Chairman Jerome Powell for the second term. Former President Donald Trump nominated Powell as Fed Chair in 2018. His second term will expire on 2025. Powell is known for his relative dovish stand on monetary policies and a key player to finetune balancing acts between aggressive and accommodative monetary stances.
Powell is highly appreciated by market participants for his timely intervention by reducing the Fed funds rate to nearly zero level and initiating a massive $120 billion per month of bond-buy program in order to maintain sufficient liquidity in the economy to cope with the pandemic-led unprecedented economic devastations. Investors welcomed Powell’s renomination as the U.S. economy is currently suffering from mounting inflationary pressure while the pandemic is still continuing.
Economic Data
IHS Markit flash survey of the U.S. manufacturing PMI (purchasing managers’ index) for the month of November came in at a two-month high of 59.1 from 58.4 in October. On the other hand, the flash survey of the U.S. services PMI for the month of November came in at a two-month low of 57 from 58.7 in October. Notably, any reading above 50 means expansion in economic activities and a reading above 50 is generally considered as exceptional.
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Stock Market News for Nov 24, 2021
Wall Street closed mixed on Tuesday after a choppy trading session. The Dow and the S&P 500 ended in positive territory while the Nasdaq Composite finished in red following rise in government bond yields. U.S. stocks markets will remain close on Thursday to observe the Thanksgiving Day.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) gained 0.6% or 194.55 points to close at 35,813.80. Notably, 20 components of the 30-stock index ended in the green while 10 in red. However, the tech-heavy Nasdaq Composite finished at 15,775.14, dropping 0.5% due to weak performance by large-cap technology stocks.
Meanwhile, the S&P 500 rose 0.2% to end at 4,690.70. Eight out of eleven sectors of the benchmark index closed in positive territory and three in red. The Energy Select Sector SPDR (XLE), the Financials Select Sector SPDR (XLF) and the Real Estate Select Sector SPDR (XLRE) rallied 3.1%, 1.6% and 1.1%, respectively.
The fear-gauge CBOE Volatility Index (VIX) was up 1.1% to 19.38. A total of 11.3 billion shares were traded on Tuesday, higher than the last 20-session average of 11.1 billion. Decliners outnumbered advancers on the NYSE by a 1.27-to-1 ratio. On Nasdaq, a 1.39-to-1 ratio favored declining issues.
Spike in Government Bond Yields
Yields on U.S. government bonds continued to rise in the past two days once President Joe Biden renominated incumbent Fed Chairman Jerome Powell for a second-term over Fed Governor Lael Brainard, who has been appointed as vice-chair of the board of governors.
Market participants consider Brainard as more dovish than Powell and expects the pace of the tapering of the central bank’s monthly bond-buy program will increase under Powell’s Chairmanship and the first rate hike may take place in the first half of 2022.
On Nov 23, the yield on the benchmark 10-year U.S. Treasury note increased 4 basis points to 1.665% in afternoon trading while the yield on the 30-year U.S. Treasury bond rose 5.1 basis points to 2.023%.
As a result, shares of major banks like The Goldman Sachs Group Inc. (GS - Free Report) and JPMorgan Chase & Co. (JPM - Free Report) were up 2.6% and 2.4%, respectively. However, shares of technology giants like Alphabet Inc. (GOOGL - Free Report) and Meta Platforms Inc. fell 0.3% and 1.1%, respectively. Alphabet sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Powell Gets Second-Term as Fed Chair
On Nov 22, President Joe Biden has nominated incumbent Fed Chairman Jerome Powell for the second term. Former President Donald Trump nominated Powell as Fed Chair in 2018. His second term will expire on 2025. Powell is known for his relative dovish stand on monetary policies and a key player to finetune balancing acts between aggressive and accommodative monetary stances.
Powell is highly appreciated by market participants for his timely intervention by reducing the Fed funds rate to nearly zero level and initiating a massive $120 billion per month of bond-buy program in order to maintain sufficient liquidity in the economy to cope with the pandemic-led unprecedented economic devastations. Investors welcomed Powell’s renomination as the U.S. economy is currently suffering from mounting inflationary pressure while the pandemic is still continuing.
Economic Data
IHS Markit flash survey of the U.S. manufacturing PMI (purchasing managers’ index) for the month of November came in at a two-month high of 59.1 from 58.4 in October. On the other hand, the flash survey of the U.S. services PMI for the month of November came in at a two-month low of 57 from 58.7 in October. Notably, any reading above 50 means expansion in economic activities and a reading above 50 is generally considered as exceptional.