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Stock Market News for Dec 13, 2022

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U.S. stocks closed sharply higher on Monday, paring some of the steep losses from last week, as investors shifted focus toward new inflation data and the Fed’s policy meeting scheduled over the next two days. All three major indexes ended in positive territory.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) climbed 1.6% or 528.58 points to close at 34,005.04 points.

The S&P 500 rose 1.4% or 56.18 points to finish at 3,990.56 points. Energy, tech and utilities stocks were the biggest gainers.

The Energy Select Sector SPDR (XLE) rallied 2.6%, while the Technology Care Select Sector SPDR (XLK) gained 2.2%. The Utilities Select Sector SPDR (XLU) advanced 2.3%. All 11 sectors of the benchmark index ended in positive territory.

The tech-heavy Nasdaq advanced 1.3% or 139.12 points to end at 11,143.74 points.

The fear-gauge CBOE Volatility Index (VIX) was up 9.51% to 25. Advancers outnumbered decliners on the NYSE by a 1.67-to-1 ratio. On Nasdaq, a 1.43-to-1 ratio favored advancing issues. A total of 10.35 billion shares were traded on Friday, lower than the last 20-session average of 10.49 billion.

Investors Optimistic Ahead of Fed Meeting

Wall Street closed sharply lower last week as investors worried about higher borrowing costs that could further slow economic growth. Also, disappointing earnings from a batch of companies further dented investors’ confidence.

However, optimism replaced the worries on Monday as investors shifted focus toward fresh inflation data. Investors are anxiously waiting for the consumer price data that will be released on Tuesday. This will give them a clearer picture of the economy.

This will be followed by the Fed’s two-day policy meeting at the end of which the central bank will announce its decision on the interest rate hike. Policy makers are expected to go for a 50-basis point hike to a range of 4.25% to 4.50%. Fed Chair Jerome Powell last week said that the central bank might scale back the pace of its interest rate increases and a 50-basis point interest rate hike will be an indication of that.

Also, the New York Fed’s November Survey of Consumer Expectations, which was released on Monday, showed that people now expect inflation to run at a rate of 5.2%. This is sharply down from 5.9% during last year’s survey.

The fears of inflation have been easing over the past few weeks now. These factors played a key role in giving investors’ confidence a boost to start a fresh week with renewed vigor, sending stocks on a rally.

Tech and stocks were big gainers on Monday. Shares of Microsoft Corporation (MSFT - Free Report) gained 2.9%, while Apple Inc. (AAPL - Free Report) advanced 1.6%. Apple has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Also, energy stocks rallied after taking a beating for weeks as oil prices finally steadied.  Shares of Exxon Mobil Corporation (XOM - Free Report) gained 2.9%, while Chevron Corporation (CVX - Free Report) rose 1%.

No economic data was released on Monday.

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