Digital Agency

U.S. Stocks Close Higher to Start 2022

U.S. Stocks Close Higher to Start 2022
Written by publishing team

US stocks rose in the first session of 2022 and Apple briefly touched the $3 trillion market capitalization, which was enough to push the Dow Jones Industrial Average and Standard & Poor’s 500 Index to new highs.

The S&P 500 added 30.38 points, or 0.6%, to 4,796.56, to close at a new record high a year later as it rose 27% and hit 70 record highs all the way. The Dow Jones rose 246.76 points, or 0.7%, to 36585.06, also hitting a new high.

The Nasdaq Composite Index rose 187.83 points, or 1.2%, to 15,832.80, but is still 1.4% from its November record of 16,057.44.

It was no surprise to see the stocks come out strong. Stocks tend to rise at the start of new calendar periods, such as the beginning of a new year, due to “new money” such as pension funds that invest when a new period begins.

“Today looks like a classic reopening,” said Scott Brown, financial market analyst at LBL. He noted that Monday’s gains were driven by stocks in the energy, consumer appreciation and financial sectors. Stocks fell in sectors less correlated with growth prospects, such as consumer goods and healthcare.

The notable winner was Apple, whose market capitalization briefly exceeded $3 trillion in the afternoon, and is the first highly regarded US listed company. The stock ended the session up $4.44, or 2.5%, at $182.01. It had to end at around $182.86 or higher to close above $3 trillion.

Aside from Apple, investors are still cautious, with most seeing a clearer path ahead for stocks this year. The initial launch of Covid-19 vaccines and the easing of restrictions to contain the spread of the coronavirus, along with easy money policies from central banks, helped support markets last year. Unwinding the Federal Reserve’s bond-purchasing program and potential interest rate increases could weigh on markets in 2022. Stocks have benefited from lower interest rates, which have fueled riskier investments.

Scientists are using automation, real-time analysis, and aggregation of data from around the world to quickly identify and understand novel coronavirus variants before the next type spreads widely. Image caption: Sharon Shee

While some investors expect inflation, which hit a 39-year high in November, has peaked, others are concerned that Omicron may prolong supply chain disruptions, adding to the pressure on prices.

“It’s going to be a little bit more bumpy than 2021,” said Estee Dweck, chief investment officer at FlowBank. “The three big questions we ended the year still here: Omicron, inflation and supply chains, and the Federal Reserve.” “There is definitely potential to outperform the stock markets. I don’t think we will see a 20% increase but we could see double numbers.”

Signs that the Omicron variant might cause significantly milder effects than previous strains also supported sentiment at the start of the year. Money managers hope this will reduce mobility restrictions affecting economic growth.

The wave we’re seeing right now, you’re seeing a lot of cases but you’re seeing fewer people in hospital and fewer deaths. “This will give reassurance to the markets,” said Gere Lode, head of global equities at Federated Hermes.

Despite the uncertainty, investors have history on their side. Since 1980, the S&P 500 has risen at least 10% in a quarter 24 times — including the most recent quarter, when it rose 10.6%. Frank Cappelaere, CEO of brokerage Instinet, said it added to those gains in 20 of the next 23 quarters.

Moreover, the index has gained more than 10% annually over the past three years, a long period of gains that have only occurred four more times, Mr. Cappelaere said. The index rose again in three of the previous four iterations.

Traders worked on the floor of the New York Stock Exchange on Friday.


Photo:

Michael Nagel/Bloomberg News

In corporate news, tech stocks are in the spotlight once again. The annual Consumer Electronics Show kicks off this week in Las Vegas, this time live in contrast to last year’s virtual conference. Companies that have a slight connection to technology, from automakers to education to healthcare, will be around in one form or another.

The technology sector of the S&P 500 rose 1% on Monday. AmazonAnd

Meta and Verizon are up. Microsoft’s stock fell $1.57, or 0.5%, to $334.75.

Tesla shares jumped $143, or 14%, to $1,199.78 after electric car maker Elon Musk said annual vehicle shipments rose 87% in 2021, growing at their fastest pace in years.

In commodities, US crude oil shed early selling, settling up 1.2% at $76.08. This helped energy companies such as Exxon Mobil, which rose $2.35, or 3.8 percent, to $63.54. The oil and gas producer also released an update indicating a potential profit win when it reports on February 1.

In the bond markets, the yield on the benchmark 10-year Treasury bond jumped to 1.628% from 1.496% on Friday. Yields rise when prices fall.

Offshore, the Stoxx Europe 600 Index rose 0.4%. Markets in China, Japan and Australia are closed for a holiday. South Korea’s Kospi closed 0.4% higher and Hong Kong’s Hang Seng fell 0.5%.

Investors are watching Chinese economic activity and policies to assess how strong global growth will be this year and whether the country’s tough Covid-19 prevention measures will put further pressure on supply chains and inflation. Ms Dweck said next month’s Winter Olympics in Beijing are built on a “Covid Zero” approach that could impact economic activity.

Write to Caitlin Ostroff at caitlin.ostroff@wsj.com and Paul Vigna at Paul.Vigna@wsj.com

Copyright © 2022 Dow Jones & Company, Inc. all rights are save. 87990cbe856818d5eddac44c7b1cdeb8

.

About the author

publishing team

Leave a Comment