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Stock Market News for Jan 11, 2022

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U.S. stocks managed to record marginal gains in the closing minutes of trading on Monday that saw the Nasdaq somehow managing to close in the green. However, the S&P 500 and Dow continued their losing streak as investors continued to worry about interest rates hikes.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) shed 0.5% or 162.79 points to finish at 36,068.87 points after falling as much as 592 points at one point of the day. The blue-chip index has now shed 730.38 points over the past four trading sessions, recording its longest losing streak since Oct 13, 2020.

The S&P 500 declined 0.1% or 6.74 points to close at 4,670.29 points, extending its losses to five consecutive sessions, the longest since Sep 10, 2020.

Almost all the sectors recorded losses, with industrial and material stocks emerging the worst performers. The Industrials Select Sector SPDR (XLI) lost 1.1%, while the Materials Select Sector SPDR (XLB) declined 1%. Nine of the 11 sectors of the benchmark index ended in negative territory.

The tech-heavy Nasdaq managed to erase the day’s losses and ended less than 0.1% up or 6.93 points to end at 14,942.83 points. The index was at one point down 2.7% but managed to make its best intraday comeback since Feb 28, 2020.

Shares of Tesla, Inc. (TSLA - Free Report) and NVIDIA Corporation (NVDA - Free Report) bounced back from earlier losses to close 3% and 0.6% higher, respectively. NVIDIA has a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

The fear-gauge CBOE Volatility Index (VIX) was up 3.41% to 19.40. A total of 12.5 billion shares were traded on Monday, higher than the last 20-session average of 10.55 billion. Decliners outnumbered advancers on the NYSE by a 2.04-to-1 ratio. On Nasdaq, a 1.97-to-1 ratio favored declining issues.

Rate Hike Worries Dampen Investors’ Spirits

Stocks have been taking a hit since the beginning of the year as minutes of Fed’s December meeting which were released last week have raised further worries of interest rate hikes this year. Policymakers have already signaled at least three rate hikes this year.

Also, economists at both The Goldman Sachs Group, Inc. (GS - Free Report) and Deutsche Bank Aktiengesellschaft (DB - Free Report) have predicted that the Fed will hike interest rates at least four times this year and trim Fed over $8 trillion balance sheet that could start as early as in the third quarter.

Moreover, if financial conditions don’t tighten notably in the coming days, Deutsche Bank economists believe that Fed officials might feel the need to raise interest rates at every policy meeting in 2022. This kept investors worried taking a toll on stocks that included almost every sector.

The rough start to the year as interest rate continue to rise also saw the 10-year Treasury yield trading above 1.8% on Monday for a brief period after ending 2021 at just 1.5%.

Markets Nearing New Technical Lows

Markets appeared to hit new technical lows on Monday. The Nasdaq which is almost near its mid-October low somehow has managed to close above its 200-day moving average of 14,688.73 for the first time since April 2020. The index also avoided to drop below its 14,451 level that would technically mark a correction as it would record a 10% fall from its recent high.

No economic report was released on Monday.