Finance
Stocks rise for a third day to extend market’s comeback from January sell-off, Dow jumps 270 points
Published
2 years agoon
By
New Yorker
Stocks rose for a third day Tuesday, as Wall Street tried to recover its footing after a wild January.
The Dow Jones Industrial Average climbed 273.38 points, or 0.8%, to 35,405.24. The S&P 500 rose 0.7% to 4,546.54. The Nasdaq Composite advanced 0.7% to 14,346.
“After being wildly distracted in the month of January, investors and traders are finally refocusing on earnings season,” said Jeff Kilburg, chief investment officer of Sanctuary Wealth. “Seeing some of these beats and improved forward guidance has created a lot of optimism inside of this earnings season, which we kind of neglected due to the fact that the Federal Reserve took the center stage.”
Bank stocks led the market higher, with Goldman Sachs and JPMorgan Chase gaining 2.6% and 1.7%, respectively. Wells Fargo also advanced more than 3.3%.
Banks got a boost as the benchmark 10-year Treasury yield rose 2 basis points to break back above 1.8% at one point. That move came even after U.S. manufacturing data for January showed more signs of rising inflation.
Big tech names like Netflix and Meta Platforms contributed to the gains, rising 7% and 1.8%, respectively. Alphabet also advanced 1.7%.
Tuesday’s moves added to a two-day rally on Wall Street that ended a volatile month of trading.
Volatile January
Over the past several days, investors have stepped in to buy a dip that briefly knocked the S&P 500 into correction territory — down at least 10% from a recent high. The large-cap index is up more than 4% in the past week.
Still, the major averages posted sharp losses for January marked by brutal price swings. The blue-chip Dow slid 3.3% for the month. The S&P 500 and Nasdaq suffered their worst monthly declines since March 2020, falling 5.3% and 8.98%, respectively. It was also the S&P 500′s biggest January decline since 2009.
January’s sell-off came as the Fed signaled its readiness to tighten monetary policy. Those moves include raising interest rates multiple times this year, to tame inflation that has shot up to the highest level in nearly four decades, and reducing its balance sheet. Investors flocked out of growth-oriented technology shares, which are particularly sensitive to rising rates.
Volatility exploded as investors deciphered the Fed’s messaging on its policy pivot. At one point last week, the S&P 500 dipped into correction territory on an intraday basis. The recent comeback pushed the large-cap benchmark 5.6% below its peak. Meanwhile, the tech-heavy Nasdaq is still in a correction, down 11% from its all-time high.
Ed Yardeni, president of Yardeni Research, said last month’s market activity hasn’t turned him bearish, however.
“We believe that once the FOMC starts to raise the federal funds rate and details the pace of running off the Fed’s balance sheet, the financial markets will learn to live with tightening monetary policy as long as it doesn’t risk causing a recession,” he said Tuesday.
To be sure, February is historically a weak trading month, said Sam Stovall, chief investment strategist at CFRA.
“We’re starting February on a traditionally weak note in that it is the second worst month of the year on average for the S&P, posting a minor decline on average and rising only 53% of the time,” Stovall said. “That makes it second worst only to September’s deeper average decline. To make matters worse, February has fallen even more whenever it follows a down January.”
Stock picks and investing trends from CNBC Pro:
Big tech earnings ahead
On Tuesday, Alphabet reported quarterly earnings after the bell. Amazon and Meta are scheduled to report later in the week.
“People are just in a holding pattern right now waiting for these big tech companies to report,” Infrastructure Capital Management CEO Jay Hatfield said.
“The combination of earning seasons starting and the bond market finding a bottom allowed the market to stabilize,” Hatfield added. “Volatility will continue to drop, and the market will just be driven by the remainder of the earnings reports.”
It’s been a solid earnings season thus far, with 78.5% of S&P 500 companies that have posted results beating bottom-line expectations as of Tuesday morning, according to FactSet.
UPS reported better-than-expected earnings and hiked its quarterly dividend, sending the stock up 14%. Shares of Exxon Mobil gained more than 6.4% after the company reported better-than-expected quarterly earnings and revenue that jumped more than 80% year over year.
Traders also pored over mixed U.S. manufacturing data. The Institute for Supply Management said its manufacturing index came in at 57.6 for January, down 1.2 points from December. The data also showed that prices jumped by 7.9 points to 76.1 month over month — a sign of rising inflation.
—CNBC’s Hannah Miao contributed to this report.
Source: CNBC
Comer denounces Greene’s motion to vacate Speaker: ‘Not the right business model’
Matty Healy's Aunt Shares His Reaction to Taylor Swift's TTPD
All of Taylor Swift’s New York Song References That Swifties Can Visit
Olivia Munn’s Cancer Treatment Led to ‘Medically Induced Menopause’—Here’s What That Means
College basketball transfer portal power rankings: Top 10 available players
Bovine Colostrum Supplements Are Everywhere—But Are the Health Benefits Legit?
You’ll Now Have to Pay Extra for an Actual Color on Your 2024 Mustang
Discover Ubud With Hoshinoya Bali
Aston Martin Reverses Course, Will Sell Combustion Cars Into the 2030s
Improved search drives OTA investment in 2024, finds Amadeus
20 Great Deals on Eco-Friendly Products to Celebrate Earth Day
Why Justin Timberlake Turned Down Working With Jay-Z
South Korean president facing 3 lame duck years? – Asia Times
4/20 grew from humble roots to marijuana’s high holiday
Bitcoin Miners Brace for the ‘Halving’—and Race to Cash In
Trending
-
Tech2 hours ago
Philosopher Daniel Dennett dead at 82
-
News2 hours ago
VW workers in Tennessee vote to join UAW in historic win for Detroit union
-
Tech2 hours ago
Amazon surprises 13 Seattle-area students with ‘Future Engineer’ college scholarships
-
Sport2 hours ago
Hamilton suffers shock early elimination in qualifying for Chinese GP
-
News1 hour ago
Pedestrian hit by car near major Tampa intersection
-
Wellness2 hours ago
What My First Time Having Sex After Giving Birth Felt Like
-
News2 hours ago
Where to find this escargot bagel — for a limited time only
-
Travel2 hours ago
UK Passengers to Turks and Caicos Islands Increase as March Sets New Record for Air Arrivals