U.S. stock benchmarks added to modest gains late Monday afternoon, with the tech-heavy Nasdaq Composite Index leading the way, after kicking off the first day of trading in 2022 on a more tentative note. Among stocks on the move, shares of Tesla surged after record-breaking quarterly sales.
How are stock indexes trading?
- The S&P 500 index SPX, +0.64% was up 26 points, or 0.5%, at 4,791.
- The Dow Jones Industrial Average DJIA, +0.68% rose 187 points, or 0.5%, to 36,525.
- The Nasdaq Composite Index COMP, +1.20% was up 169 points, or 1%, at 15,814.
Stocks fell Friday on the last trading day of 2021. For last year, the S&P 500 soared 26.9%, beating both the Nasdaq’s 21.4% rise and the Dow’s 18.7% climb.
What’s driving the stock market?
Stocks were higher after a bumpy start to the session amid a number of lingering concerns — including the surge in COVID-19 cases spurred by the rapid spread of the omicron coronavirus variant and the likelihood of multiple interest-rate hikes by the Federal Reserve, expected later this year.
Read: Odds of a March rate hike by the Federal Reserve are back above 50%
Financial markets were reflecting “broad optimism that the economy can weather omicron, as well as rate hikes from the Fed,” said Tom Garretson, senior portfolio strategist at RBC Wealth Management, citing the resteepening of the Treasury yield curve to levels last seen around November.
“The economic outlook should be strong enough to support all those things,” he said via phone.
The Nasdaq Composite Index led the way Monday among stock benchmarks as “most investors take a more optimistic view on large-cap tech companies being potentially able to adapt to pandemic conditions,” said Timothy Chubb, chief investment officer at Girard, a wealth advisory firm based King of Prussia, Pennsylvania.
Even as Treasury rates rose across the board, the historically negative correlation between higher yields and the Nasdaq index “hasn’t necessarily held today,” Chubb said via phone.
Travel chaos greeted the start of the year, with more than 2,600 U.S. flights canceled on Sunday, amid winter storms and shortages of workers due to the fast-spreading omicron variant. Federal offices were also shut in Washington, D.C., as winter weather bore down on the mid-Atlantic.
The final reading of the IHS Markit purchasing managers index for manufacturing edged down to 57.7 from an initial reading of 57.8.
Separately, spending on construction projects rose 0.4% in November at a seasonally adjusted annual rate of $1.63 trillion, the Commerce Department reported Monday. Economists polled by The Wall Street Journal had expected a 0.7% increase. Spending in October was raised to a 0.4% gain from the prior estimate of a 0.2% rise.
Which companies are in focus?
- Shares of Tesla Inc. TSLA, +13.53% jumped 12%, after the electric-vehicle maker delivered more than 308,000 vehicles in the fourth quarter, blowing away analysts’ expectations. Deliveries surged about 87% in 2021.
- Shares of Apple Inc. AAPL, +2.50% briefly crossed the threshold required for the company to achieve a $3 trillion market value Monday, though the stock turned lower. The shares need to close at or higher than $182.86 to reach the threshold. Apple shares rose 2.4%.
- U.S.-listed shares of BioNTech SE BNTX, -10.07% were down 8.4% and those for Pfizer Inc. PFE, -4.06% were off 3.6% even after American health regulators cleared the use of a COVID-19 booster from those companies in teens as young as 12 years old.
- U.S.-listed shares of Nio Inc. NIO, +5.65% rose 5.3% after the China-based electric vehicle maker announced record fourth-quarter deliveries.
How are other assets trading?
- The yield on the 10-year Treasury note TMUBMUSD10Y, 1.633% was trading around 1.625%, up 11 basis points. Yields and debt prices move opposite each other.
- The ICE U.S. Dollar Index DXY, +0.26%, a measure of the currency against a basket of six major rivals, rose 0.3%.
- Oil futures rebounded, with West Texas Intermediate crude for February delivery CLG22, +1.12% climbing 87 cents, or 1.2%, to settle at $76.08 per barrel.
- Gold futures GC00, -1.49% for February delivery GCG22, -1.49% settled at $1,800.10 per ounce, down $28.50 or 1.6%, after 2021 marked the sharpest annual fall since 2015.
- Bitcoin BTCUSD, -1.98% was down 1.3%.
- The Stoxx Europe 600 SXXP, +0.45% finished 0.4% higher, hitting a fresh record close. Markets in London were closed for the holiday.
- Several Asian markets were closed for holidays. The Hang Seng Index HSI, -0.53% finished 0.5% lower, while the Korea KOSPI 180721, +0.37% closed up by 0.4%.
Mark Decambre and Mike Murphy contributed to this article
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