Stock market today: Dow extended records as tech stocks stumbled

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Wall Street is off to a good start in 2022.

The time of dreams

Major stock indexes ended mixed on Tuesday, although the market had a better day than it appeared on the surface. Economic data has shown that supply chain constraints are easing, allowing the momentum of the Dow to continue into December.

the


Dow Jones Industrial Average

finished up 215 points, or 0.6%, breaking the index’s closing record set on Monday. The Dow Jones has now risen more than 5% from its December 20, 2021 low.


S&P 500,

meanwhile, ended the day down 0.1% after also closing at a new high in Monday’s session. Heavy technology


Nasdaq composite

fell 1.3%.

While tech stocks dragged indexes down, most stocks were up. The Invesco S&P 500 Equal Weight Exchange-Traded Fund (RSP), which weights each stock in the index equally and therefore shows the movement of the average stock, gained 0.8%.

The Institute for Supply Management’s manufacturing index slipped to 58.7 in December, missing expectations of 60 and down from the previous reading of 61.1. But the latest report contained encouraging signals.

Supply chain constraints are improving. This means slower cost increases for businesses, causing them less incentive to raise prices and contribute to inflation. The price paid index fell from 82.4 to 68.2. Supplier delivery times have also fallen. “The pressures on the supply chain resulting in longer delivery times and higher prices may ease,” wrote Andrew Hollenhorst, economist at Citigroup.

This gives more assurance that the Federal Reserve will not act too quickly by raising interest rates.

Data on job vacancies for November also contributed to this narrative. Job vacancies were 10.6 million, lower than estimates of 11.1 million and lower than the previous result of 11.1 million, after a record 4.5 million Americans left their jobs. Fewer openings mean that companies are not looking for as many workers as expected, which could slow the pace of wage increases and therefore slow inflation.

The stock market reflected investor optimism for long-term economic growth on Tuesday. Any indication that the Fed will be less aggressive in raising interest rates is an indication that economic growth may be higher, not lower. The most economically sensitive value stocks outperformed growth stocks by leaps and bounds on Tuesday. “The higher rates [Treasury yields] and economic hopes help, ”wrote Andrew Brenner of NatAlliance Securities.

Indeed, rising bond yields weighed on tech stocks. The 10-year Treasury yield climbed to 1.66%, after rising on Monday after a 1.51% close on Friday. The yield level is approaching its pandemic-era high of 1.75%. The higher yield reflects higher expectations for long-term inflation, which is bad for tech stocks that rely on long-term earnings.

Overall, the stock market has been in a good mood lately. The Santa Claus rally, when the market rises in late December as people fund their retirement accounts and other positions to hold more stocks at the end of the year, continued into the New Year. In two trading days to start 2022, the S&P 500 is up 0.6%.

West Texas Intermediate crude futures gained 1% to over $ 77 a barrel, even after OPEC said it would increase production as the global economic recovery remains on track. “This will be encouraging for investors and could keep oil prices high,” wrote Craig Erlam, senior market analyst at Oanda.

Abroad, in London


FTSE 100

jumped 1.6% as UK traders began their first session of 2022 after a bank holiday Monday. In Tokyo, the


Nikkei 225

outperformed its Asian peers with an increase of 1.8%.

that of Hong Kong


Hang Seng

index barely finished above the plate and the


Shanghai Composite

fell 0.2%.

In addition to the pressure exerted by China on the Covid-19, its central bank has decided to drain liquidity. The People’s Bank of China slashed its short-term cash injections on Tuesday, leading to the largest cash drain since October, Bloomberg reported.

Here are six actions in motion on Tuesday:

After briefly hitting a market cap of $ 3 trillion on Monday – the first public company in the world to achieve that market value –


Apple

(ticker: AAPL) was down 1.3% on Tuesday.

Cruise company


Carnival Corp.

(CCL) rose 1.5% after jumping 6.4% on Monday. Inventories of cruise ships have generally increased, despite Omicron’s impact on their operations, including an increase in cases among passengers in their fleets.

Although he has agreed to delay the rollout of a new 5G service for two weeks due to aviation safety concerns,


AT&T

(T) and


Verizon

Equities (VZ) held up well, rising 0.8% and 2%, respectively.


SunPower

The stock (SPWR) fell 0.1% even after being upgraded to Market Perform’s Outperform at Raymond James.


Under protection

The stock (UAA) gained 0.8% after being upgraded to Outperform Neutral at Baird.

Write to Jack Denton at [email protected] and Jacob Sonenshine at [email protected]


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