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U.S. stock markets closed sharply higher on Monday after finishing the first week of 2024 in red. Technology stocks rebounded following a decline in the yield of U.S. government bond yield. However, the time when the Fed will initiate first interest rate cut remained uncertain. All three major stock indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) was up 0.6% or 216.9 points to close at 37,683.01. At intraday low, the blue-chip index was down nearly 217 points. Notably, 23 components of the 30-stock index ended in positive territory, while 7 ended in negative zone.
The tech-heavy Nasdaq Composite finished at 14,843.77 or 319.70 points, jumping 2.2% due to strong performance of large-cap technology stocks. Tech behemoths like CrowdStrike Holdings Inc. (CRWD - Free Report) and Advanced Micro Devices Inc. (AMD - Free Report) , advanced 5.5% and 5.4%, respectively. CrowdStrike Holdings currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The S&P 500 climbed 1.4% to finish at 4,763.54. Seven out of 10 broad sectors of the broad-market index ended in positive territory while one in negative zone. The Communication Services Select Sector SPDR (XLC), the Technology Select Sector SPDR (XLK) and the Consumer Discretionary Select SPDR (XLY) and the Real Estate Select Sector SPDR (XLRE) advanced 1.6%, 2.5%, 1.7% and 1.4%, respectively. On the other hand, the Energy Select Sector SPDR (XLE) decline 1.6%.
The fear-gauge CBOE Volatility Index (VIX) was down 2% to 13.08. Advancers outnumbered decliners on the NYSE by a 3-to-1 ratio. On Nasdaq, a 2.3-to-1 ratio favored advancing issues. The S&P 500 posted 13 new highs and no new lows while the Nasdaq recorded 101 new highs and 92 new lows.
U.S. Economy Cooling
The Institute of Supply Management (ISM) reported that the manufacturing Index for December came in at 47.4, marginally ahead of the consensus estimate of 47.2. The reading for November was 46.7. Any reading below 50 indicates a contraction in manufacturing activities.
December marked the 14th consecutive month of manufacturing contraction after 28th months of expansion. The new orders Index remained in contraction territory at 47.1, lower than November’s reading of 48.3.
The ISM also reported that the services Index for December came in at 50.6, reflecting the 12th consecutive months of expansion. Any reading above 50 indicates an expansion in services activities. However, the metric was lower than November’s data of 52.7 and the consensus estimate of 52.5.
The sub index for new orders came in at 52.8 in December compared with 55.5 in November. The sub index for employment contracted to 43.3 in December from 50.7 in November. December’s data was the lowest since May 2020.
Labor Market Remains Resilient
The Department of Labor reported that the U.S. economy added 216,000 jobs in December, beating the consensus estimate of 170,000. However, the metric for November was revised downward to 173,000 from 199,000.
The unemployment rate in December was 3.7%, flat month over month but below the consensus estimate of 3.8%. The average hourly wage rate increased 0.4% in December, flat with November but higher than the consensus estimate of 0.3%. Year over year, the wage rate increased 4.1% in December, beating the consensus estimate of 3.9%.
Uncertainty on Rate Cut
Market participants remained clueless when the Fed will initiate first rate cut. Federal Reserve Governor Michelle Bowman said that she believes rate hike cycle is over. However, she is not yet convinced that the economy is in proper shape to initiate interest rate cut anytime soon.
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Stock Market News for Jan 9, 2024
U.S. stock markets closed sharply higher on Monday after finishing the first week of 2024 in red. Technology stocks rebounded following a decline in the yield of U.S. government bond yield. However, the time when the Fed will initiate first interest rate cut remained uncertain. All three major stock indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) was up 0.6% or 216.9 points to close at 37,683.01. At intraday low, the blue-chip index was down nearly 217 points. Notably, 23 components of the 30-stock index ended in positive territory, while 7 ended in negative zone.
The tech-heavy Nasdaq Composite finished at 14,843.77 or 319.70 points, jumping 2.2% due to strong performance of large-cap technology stocks. Tech behemoths like CrowdStrike Holdings Inc. (CRWD - Free Report) and Advanced Micro Devices Inc. (AMD - Free Report) , advanced 5.5% and 5.4%, respectively. CrowdStrike Holdings currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The S&P 500 climbed 1.4% to finish at 4,763.54. Seven out of 10 broad sectors of the broad-market index ended in positive territory while one in negative zone. The Communication Services Select Sector SPDR (XLC), the Technology Select Sector SPDR (XLK) and the Consumer Discretionary Select SPDR (XLY) and the Real Estate Select Sector SPDR (XLRE) advanced 1.6%, 2.5%, 1.7% and 1.4%, respectively. On the other hand, the Energy Select Sector SPDR (XLE) decline 1.6%.
The fear-gauge CBOE Volatility Index (VIX) was down 2% to 13.08. Advancers outnumbered decliners on the NYSE by a 3-to-1 ratio. On Nasdaq, a 2.3-to-1 ratio favored advancing issues. The S&P 500 posted 13 new highs and no new lows while the Nasdaq recorded 101 new highs and 92 new lows.
U.S. Economy Cooling
The Institute of Supply Management (ISM) reported that the manufacturing Index for December came in at 47.4, marginally ahead of the consensus estimate of 47.2. The reading for November was 46.7. Any reading below 50 indicates a contraction in manufacturing activities.
December marked the 14th consecutive month of manufacturing contraction after 28th months of expansion. The new orders Index remained in contraction territory at 47.1, lower than November’s reading of 48.3.
The ISM also reported that the services Index for December came in at 50.6, reflecting the 12th consecutive months of expansion. Any reading above 50 indicates an expansion in services activities. However, the metric was lower than November’s data of 52.7 and the consensus estimate of 52.5.
The sub index for new orders came in at 52.8 in December compared with 55.5 in November. The sub index for employment contracted to 43.3 in December from 50.7 in November. December’s data was the lowest since May 2020.
Labor Market Remains Resilient
The Department of Labor reported that the U.S. economy added 216,000 jobs in December, beating the consensus estimate of 170,000. However, the metric for November was revised downward to 173,000 from 199,000.
The unemployment rate in December was 3.7%, flat month over month but below the consensus estimate of 3.8%. The average hourly wage rate increased 0.4% in December, flat with November but higher than the consensus estimate of 0.3%. Year over year, the wage rate increased 4.1% in December, beating the consensus estimate of 3.9%.
Uncertainty on Rate Cut
Market participants remained clueless when the Fed will initiate first rate cut. Federal Reserve Governor Michelle Bowman said that she believes rate hike cycle is over. However, she is not yet convinced that the economy is in proper shape to initiate interest rate cut anytime soon.