The Dow Jones Industrial Average rose on Tuesday after ending the first trading day of 2022 at a record high, while technology shares slid.
Shares of economically sensitive companies advanced in the energy, financial and industrial sectors, helping the stellar gauge outperform other major US indices. Meanwhile, declines in big tech stocks weighed on the S&P 500 and Nasdaq Composite.
The Dow Jones Industrial Average rose 0.5%, or about 168 points, based on a record high set on Monday. The S&P 500 was down 0.4%, and the Nasdaq Composite was down 1.9%.
The divergence occurred between different corners of the stock market as investors analyzed new data showing expanding US factory activity and a tight labor market.
A survey of the manufacturing sector showed signs that supply chain problems could improve. Separate data showed that the number of times workers quit their jobs rose to a high in November while job opportunities remained near record levels.
In the bond markets, the yield on the 10-year US Treasury rose to 1.675% from 1.628% on Monday. Yields rise as bond prices fall.
Within the S&P 500, the energy sector advanced 3.3%, the financial sector gained 2.4%, and the industrial sector gained 1.8%. Technology Group’s stock fell 1.8%.
Traders tend to pile into tech stocks when economic worries escalate, betting that these stocks can deliver growth. As prospects get brighter, they often turn to companies that can harness themselves in a strong economy.
Investors are also analyzing data about the prevalence of the Omicron variant of Covid-19 as they try to predict how the pandemic will affect the economy in the future. Cases are at a record high in the United States, while the number of hospitalizations is rising, but are still below their epidemiological peak, according to data from Johns Hopkins University.
“Omicron’s moderation, and therefore, the potential for less disruption, and reduced shutdown actions – all of these should directly feed earnings expectations,” said James Athey, Abrdn’s chief investment officer.
Among individual stocks, Apple shares fell 1.4% after the company on Monday briefly touched $3 trillion in market capitalization before closing below that limit. Tesla shares fell 3.6 percent after jumping 14 percent on Monday.
The number of travel stocks rose. Royal Caribbean shares rose 1.8 percent, United Airlines shares rose 1.9 percent, and Marriott International shares rose 2.9 percent.
Oil prices rose after OPEC and a group of oil producers led by Russia agreed to keep pumping more crude in a bet that the global rise in Covid-19 cases would not dampen demand like previous waves of the virus. Brent crude rose 1.5 percent to $80.13 a barrel.
Bitcoin stabilized after a two-day slump, rising 0.4% compared to its level at 5 pm ET on Monday. It was trading around $46,230, down 32% from its November record, based on 5pm levels.
Offshore, the Stoxx Europe 600 continental index rose 0.8% to close at a record high.
In Asia, the main criteria were mixed. The Shanghai Composite Index fell 0.2% after new data showed that Chinese exports were broadly stagnant last month due to weak foreign demand, even as manufacturing activity rebounded.
Hong Kong’s Hang Seng Index rose 0.1%. Japan’s Nikkei 225 closed 1.8% higher as a weak yen drew investors into the country’s stock market.
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