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Dow gains as stocks try to shake off dismal start to 2024

The Elite Times TeamBy No Comments5 Mins Read

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U.S. stocks stalled on Thursday, struggling to shake off a dismal start to the year after Federal Reserve policymakers left hopes of an early interest rate cut.

The Dow Jones Industrial Average (^DJI) rose about 0.2%, while the benchmark S&P 500 (^GSPC) fell about 0.1%. Tech stocks showed signs of returning to Wednesday’s losses, with the Nasdaq Composite Index (^IXIC) down about 0.4%.

Investors looking for certainty about a March interest rate cut instead got more uncertainty from the Fed’s minutes released Wednesday. Officials agreed that interest rates had peaked and should be lowered by the end of 2024, but some said that depending on the path of inflation, interest rates could remain at historically high levels “for some time.” He suggested that it may remain.

read more: Impact of the Fed’s interest rate hike suspension on bank accounts, CDs, loans, and credit cards

Multiple indicators released Thursday morning showed the labor market remained healthy while wages continued to cool, a welcome sign in the fight against inflation.

The latest ADP jobs report showed private sector payrolls rose by 164,000 people in December, higher than November’s 103,000 and ahead of analysts’ expectations for an increase of 115,000.

Elsewhere, the Labor Department reported that 202,000 unemployment claims were filed last week, lower than economists’ expectations of 216,000.

Meanwhile, U.S. Treasury yields are back on the rise, with the 10-year Treasury yield (^TNX) nearing 4% after moving away from that level on Wednesday.

In commodities, oil prices rose following yesterday’s gains as Libyan supply issues and Red Sea tensions kept markets on edge. West Texas Intermediate crude oil futures (CL=F) hovered around $73 per barrel, while Brent crude oil (BZ=F) exceeded $78 per barrel.

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  • Bank of America says 2024 is off to a tough start, but earnings could still drive stock gains

    The stock price is scheduled to begin in 2024.

    The famous Santa Claus rally did not come. The Nasdaq Composite Index (^IXIC) opened the new year for the fourth time in its history. And the Russell 2000 (^RUT), the darling of recent market gains, is off to its third-worst two-day start on record.

    “It is no exaggeration to say that financial markets started 2024 with something of a mild hangover,” Deputy Chief Market Economist Jonas Goltermann said in a research note on Wednesday.

    But some on Wall Street believe the current market dynamics are macro-focused. The rally could continue if that sentiment shifts focus to earnings.

    Analysts expect full-year earnings growth for S&P 500 companies to be 11.7%, which would outpace the 10-year average annual earnings growth rate of 8.4%, according to recent data from FactSet.

    That earnings background is one of the main reasons why Bank of America sees the S&P 500 index trading at nearly 10% from current levels, said Oson Kwon, an equity strategist at Boffa.

    “The earnings season starting next week will be key for the market,” Kwon said.

    With the company officially emerging from an earnings recession in the third quarter, Kwon believes it’s important for the bullish case to continue momentum.

    “Companies have been cutting costs throughout the revenue downturn,” Kwon said. “They’re managing margins. Margins have increased for the second consecutive quarter. So given that interest rate pressure and macro uncertainty has eased some, I hope companies speak more positively this earnings season. , I think the momentum will be on the upswing. Now, it’s going to be bullish on stocks. ”

  • Stock prices are unstable as they approach each other

    U.S. stocks stalled on Thursday, struggling to shake off a dismal start to the year after Federal Reserve policymakers left hopes of an early interest rate cut.

    The Dow Jones Industrial Average (^DJI) rose about 0.2%, while the benchmark S&P 500 (^GSPC) fell about 0.1%. Tech stocks showed signs of returning to Wednesday’s losses, with the Nasdaq Composite Index (^IXIC) down about 0.4%.

  • Signs of further soft landing in the labor market

    Indicators released Thursday morning show the labor market remains healthy while wages continue to cool, a welcome sign in the fight against inflation.

    The latest ADP jobs report showed private sector payrolls rose by 164,000 people in December, higher than November’s 103,000 and ahead of analysts’ expectations for an increase of 115,000.

    ADP also revealed in its announcement that the annual wage growth rate fell to 5.4% from 5.6% in the previous month.

    “We are returning to a labor market that closely matches pre-pandemic employment conditions,” said Nella Richardson, chief economist at ADP. She said: “While wages did not cause the recent inflation, the risk of a wage-price spiral has all but disappeared now that wage growth has receded.”

    Labor Department data showed 202,000 claims for unemployment benefits were filed last week, lower than the 216,000 expected by economists. Unemployment claims are an area several economists told Yahoo Finance are monitoring for signs of an economic slowdown, as rising claims mean more people are being laid off. he said.

    The December jobs report is scheduled to be released at 8:30 a.m. ET on Friday, with investors still awaiting this week’s big labor update.

  • Apple downgraded for second time this week

    Apple (AAPL) suffered its second downgrade in four days in 2024, this time from Piper Sandler.

    Analyst Harsh Kumar’s reasons for the downgrade were similar to those cited by Barclays’ peers earlier this week. That is the demand for iPhones, especially in the Chinese market, which is expected to be sluggish.

    Apple stock has already taken a hit this year, falling more than 1% in premarket trading Thursday.

    Piper Sandler’s downgrade from overweight to neutral may not have been as shocking as Barclays, which downgraded its rating to underweight on Tuesday. Apple stock reacted with its biggest decline since September.

    According to Bloomberg, the percentage of analysts giving the stock a bullish rating is the lowest in three years.

For the latest stock market news and in-depth analysis of price-moving events, click here.

Read the latest financial and business news from Yahoo Finance

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