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Wall Street closed sharply higher on Friday, led by a rally in energy and tech stocks. The market instinctively rebounded from a Fed-induced gloom and completed its first winning week in a month. Investors, however, remain apprehensive about the economic outlook as statements from multiple Fed officials have confirmed further tightening of monetary policy. All three major stock indexes ended in the green.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) gained 1.2% or 377.19 points, to close at 32,151.71. Twenty-four components of the 30-stock index ended in the positive territory, while six ended in the negative.
The tech-heavy Nasdaq Composite increased by 250.18 points or 2.1% to 12,112.31, led by a rally in tech stocks.
The S&P 500 rose 1.5%, or 61.18 points, to end at 4,067.36. All 11 broad sectors of the benchmark index closed in the green. The Communication Services Select Sector SPDR (XLC), the Energy Select Sector SPDR (XLE) and the Technology Select Sector SPDR (XLK) rose 2.8%, 2.5% and 2%, respectively.
The fear-gauge CBOE Volatility Index (VIX) decreased 3.5% to 22.79. A total of 9.9 billion shares were traded on Friday, lower than the last 20-session average of 10.2 billion. Advancers outnumbered decliners on the NYSE by a 5.14-to-1 ratio. On the Nasdaq, a 2.58-to-1 ratio favored the advancing issues.
Indexes Make Gains Despite a Hawkish Fed
Stocks rallied on Friday since all the major indexes registered their first weekly gain in four weeks as market participants went on a buying spree, rising above concerns about the economic outlook. The gains are a rebound from the sharp sell-off that began in August over concerns about the impact of higher interest rates in the United States and a possible economic slowdown in Europe and China. In the week ended Friday, the market was seen correcting itself from overselling.
The session’s positive trading happened even as more Fed officials came forward and bolstered the central bank’s commitment to tackle inflation by further monetary policy tightening. About the state of the labor market and how the Fed sees it as a marker to gauge inflation, Fed Governor Christopher Waller said, "If the unemployment were to stay under 5%, I think we could be really aggressive on inflation. Once it gets over 5 there are going to be obvious pressures to start making tradeoffs. If we don't get inflation down, we're in trouble," Waller said in a media event. In an even ominous tone, he mentioned that the Fed should be aggressive with rate hikes while the economy “can take a punch.”
Kansas City Fed President Esther George mentioned that inflation remains far too high and policy makers have a “clear-cut” case for continuing to tighten monetary policy. However, she also said that officials should prioritize steadiness over speed. In recent months, the Fed official has expressed caution about the pace of rate hikes.
Investors will be keeping a keen watch on the monthly inflation data slated to be released later this week to get a hang of the direction the Fed will be taking, even as they try to shrug off fears of economic slowdown. Communication services, tech and energy stocks were the big gainer on Friday.
The U.S. Census Bureau said on Friday that Wholesale Inventories for July 2022, after adjustment for seasonal variations and trading-day differences, but not for price changes, had come in at $900.7 billion, increasing 0.6% from June. They had increased 1.8% in June, the prior period.
Weekly Roundup
The major indexes closed their first winning week since mid-August with the Dow Jones Industrial Average, the S&P 500 and the Nasdaq gaining 2.7%, 3.7% and 4.1%, respectively. Investors have looked beyond Fed warnings of further tightening of monetary policy and have been on a buying spree.
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Stock Market News for Sep 12, 2022
Wall Street closed sharply higher on Friday, led by a rally in energy and tech stocks. The market instinctively rebounded from a Fed-induced gloom and completed its first winning week in a month. Investors, however, remain apprehensive about the economic outlook as statements from multiple Fed officials have confirmed further tightening of monetary policy. All three major stock indexes ended in the green.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) gained 1.2% or 377.19 points, to close at 32,151.71. Twenty-four components of the 30-stock index ended in the positive territory, while six ended in the negative.
The tech-heavy Nasdaq Composite increased by 250.18 points or 2.1% to 12,112.31, led by a rally in tech stocks.
The S&P 500 rose 1.5%, or 61.18 points, to end at 4,067.36. All 11 broad sectors of the benchmark index closed in the green. The Communication Services Select Sector SPDR (XLC), the Energy Select Sector SPDR (XLE) and the Technology Select Sector SPDR (XLK) rose 2.8%, 2.5% and 2%, respectively.
The fear-gauge CBOE Volatility Index (VIX) decreased 3.5% to 22.79. A total of 9.9 billion shares were traded on Friday, lower than the last 20-session average of 10.2 billion. Advancers outnumbered decliners on the NYSE by a 5.14-to-1 ratio. On the Nasdaq, a 2.58-to-1 ratio favored the advancing issues.
Indexes Make Gains Despite a Hawkish Fed
Stocks rallied on Friday since all the major indexes registered their first weekly gain in four weeks as market participants went on a buying spree, rising above concerns about the economic outlook. The gains are a rebound from the sharp sell-off that began in August over concerns about the impact of higher interest rates in the United States and a possible economic slowdown in Europe and China. In the week ended Friday, the market was seen correcting itself from overselling.
The session’s positive trading happened even as more Fed officials came forward and bolstered the central bank’s commitment to tackle inflation by further monetary policy tightening. About the state of the labor market and how the Fed sees it as a marker to gauge inflation, Fed Governor Christopher Waller said, "If the unemployment were to stay under 5%, I think we could be really aggressive on inflation. Once it gets over 5 there are going to be obvious pressures to start making tradeoffs. If we don't get inflation down, we're in trouble," Waller said in a media event. In an even ominous tone, he mentioned that the Fed should be aggressive with rate hikes while the economy “can take a punch.”
Kansas City Fed President Esther George mentioned that inflation remains far too high and policy makers have a “clear-cut” case for continuing to tighten monetary policy. However, she also said that officials should prioritize steadiness over speed. In recent months, the Fed official has expressed caution about the pace of rate hikes.
Investors will be keeping a keen watch on the monthly inflation data slated to be released later this week to get a hang of the direction the Fed will be taking, even as they try to shrug off fears of economic slowdown. Communication services, tech and energy stocks were the big gainer on Friday.
Consequently, shares of DISH Network Corporation and Halliburton Company (HAL - Free Report) advanced 8.6% and 4.4%, respectively. Each carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
The U.S. Census Bureau said on Friday that Wholesale Inventories for July 2022, after adjustment for seasonal variations and trading-day differences, but not for price changes, had come in at $900.7 billion, increasing 0.6% from June. They had increased 1.8% in June, the prior period.
Weekly Roundup
The major indexes closed their first winning week since mid-August with the Dow Jones Industrial Average, the S&P 500 and the Nasdaq gaining 2.7%, 3.7% and 4.1%, respectively. Investors have looked beyond Fed warnings of further tightening of monetary policy and have been on a buying spree.