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Wall Street closed slightly higher in a choppy session on Wednesday, led by energy stocks. The market remained apprehensive about policy tightening by the Fed but made gains from oil prices rising on supply concerns. Economic data released on the day brought some relief as producer-side inflation went down a bit. All three major stock indexes ended slightly in the green.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.1% or 30.12 points to close at 31,135.09. Seventeen components of the 30-stock index ended in positive territory, while 13 ended in negative.
The tech-heavy Nasdaq Composite added 86.10 points or 0.7% to 11,719.68.
The S&P 500 gained 0.3%, or 13.32 points, to end at 3,946.01. Six of the 11 broad sectors of the benchmark index closed in the green. The Energy Select Sector SPDR (XLE), the Consumer Discretionary Select Sector SPDR (XLY) and the Utilities Select Sector SPDR (XLU) advanced 2.8%, 1.3% and 0.8%, respectively, while the Materials Select Sector SPDR (XLB) and the Real Estate Select Sector SPDR (XLRE) both regressed 1.2%.
The fear-gauge CBOE Volatility Index (VIX) decreased 4.1% to 26.16. A total of 10.9 billion shares were traded on Wednesday, higher than the last 20-session average of 10.3 billion. Advancers outnumbered decliners on the NYSE by a 1.05-to-1 ratio. On the Nasdaq, a 1.06-to-1 ratio favored the declining issues.
Energy Stocks Drive The Market
Oil prices went up 1% on Wednesday on expectations that this winter, consumers would switch from gas to oil because of price pressure. Per the latest government data, crude inventories in the United States rose for the second week in a row, boosted by the ongoing releases from the Strategic Petroleum Reserve. Commercial crude stocks rose by 2.4 million barrels. However, a looming recession and the weakness in China’s economy are expected to keep demand in check in the foreseeable future, with the country being the largest oil importer in the world.
Possible rail stoppage in the United States due to ongoing labor disputes might be another factor contributing to the rise in oil prices. Brent crude settled up $0.93, or 1%, at $94.10/barrel, while WTI crude ended $1.17, or 1.3% higher at $88.48/barrel.
Markets rebounded slightly on Wednesday from the two-year high selloff witnessed the day before, but it can be attributed more to the course correction than optimism. The CPI numbers released earlier in the week had already influenced market participants to ponder that rather than a range of 50 to 75 bps interest rate hikes expected earlier, we are looking more in the order of a 75 to 100 bps hike. The Fed meets for its FOMC policy discussions next week and is likely to announce the aforementioned hike in its bid to bring down inflation within a manageable range. Investor mood remains grim, but it will be interesting to see whether the market prices in a possible 100 bps hike, or a third consecutive 75 bps hike in the days leading up to the meeting.
Economic Data
According to the Bureau of Labor Statistics, The Producer Price Index (PPI) for final demand fell 0.1% in August, seasonally adjusted. On an unadjusted basis, the index for final demand moved up 8.7% for the 12 months ended in August.
Core PPI, which accounts for prices for final demand less foods, energy, and trade services moved up 0.2% in August, following a 0.1% rise in July. For the 12 months ended in August, the index for final demand less foods, energy, and trade services increased 5.6%.
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Stock Market News for Sep 15, 2022
Wall Street closed slightly higher in a choppy session on Wednesday, led by energy stocks. The market remained apprehensive about policy tightening by the Fed but made gains from oil prices rising on supply concerns. Economic data released on the day brought some relief as producer-side inflation went down a bit. All three major stock indexes ended slightly in the green.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.1% or 30.12 points to close at 31,135.09. Seventeen components of the 30-stock index ended in positive territory, while 13 ended in negative.
The tech-heavy Nasdaq Composite added 86.10 points or 0.7% to 11,719.68.
The S&P 500 gained 0.3%, or 13.32 points, to end at 3,946.01. Six of the 11 broad sectors of the benchmark index closed in the green. The Energy Select Sector SPDR (XLE), the Consumer Discretionary Select Sector SPDR (XLY) and the Utilities Select Sector SPDR (XLU) advanced 2.8%, 1.3% and 0.8%, respectively, while the Materials Select Sector SPDR (XLB) and the Real Estate Select Sector SPDR (XLRE) both regressed 1.2%.
The fear-gauge CBOE Volatility Index (VIX) decreased 4.1% to 26.16. A total of 10.9 billion shares were traded on Wednesday, higher than the last 20-session average of 10.3 billion. Advancers outnumbered decliners on the NYSE by a 1.05-to-1 ratio. On the Nasdaq, a 1.06-to-1 ratio favored the declining issues.
Energy Stocks Drive The Market
Oil prices went up 1% on Wednesday on expectations that this winter, consumers would switch from gas to oil because of price pressure. Per the latest government data, crude inventories in the United States rose for the second week in a row, boosted by the ongoing releases from the Strategic Petroleum Reserve. Commercial crude stocks rose by 2.4 million barrels. However, a looming recession and the weakness in China’s economy are expected to keep demand in check in the foreseeable future, with the country being the largest oil importer in the world.
Possible rail stoppage in the United States due to ongoing labor disputes might be another factor contributing to the rise in oil prices. Brent crude settled up $0.93, or 1%, at $94.10/barrel, while WTI crude ended $1.17, or 1.3% higher at $88.48/barrel.
Consequently, shares of Coterra Energy Inc. (CTRA - Free Report) and Enphase Energy, Inc. (ENPH - Free Report) gained 7.2% and 5%, respectively. Both stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Investors Weary of September Fed Meet
Markets rebounded slightly on Wednesday from the two-year high selloff witnessed the day before, but it can be attributed more to the course correction than optimism. The CPI numbers released earlier in the week had already influenced market participants to ponder that rather than a range of 50 to 75 bps interest rate hikes expected earlier, we are looking more in the order of a 75 to 100 bps hike. The Fed meets for its FOMC policy discussions next week and is likely to announce the aforementioned hike in its bid to bring down inflation within a manageable range. Investor mood remains grim, but it will be interesting to see whether the market prices in a possible 100 bps hike, or a third consecutive 75 bps hike in the days leading up to the meeting.
Economic Data
According to the Bureau of Labor Statistics, The Producer Price Index (PPI) for final demand fell 0.1% in August, seasonally adjusted. On an unadjusted basis, the index for final demand moved up 8.7% for the 12 months ended in August.
Core PPI, which accounts for prices for final demand less foods, energy, and trade services moved up 0.2% in August, following a 0.1% rise in July. For the 12 months ended in August, the index for final demand less foods, energy, and trade services increased 5.6%.