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  • Writer's pictureThe San Juan Daily Star

Stocks close slightly up after prior week’s selloff

U.S. stocks eked out a slight gain on Monday as investors engaged in some bargain hunting after last week’s losses, the biggest percentage declines of 2023 for Wall Street’s main benchmarks, as jitters persisted about coming interest rate hikes to tame stubbornly high inflation.

All three main stock indexes climbed more than 1% shortly after the opening bell, in part due to an easing in Treasury yields, and all three closed well off their session highs.

Stocks steadily gave up gains throughout the session as U.S. Treasury yields moved off the day’s lows.

“On the heels of the worst week of the year, first three-week losing streak for the S&P since December, a little green is a welcome change but again the reality is market participants are trying to square the circle with exactly how long the Fed will leave rates high, and is a 50 basis point hike really on the table at the next meeting,” said Ryan Detrick, chief market strategist at Carson Group in Omaha, Nebraska.

“It’s led to a good deal of uncertainty, and we have seen that when there is uncertainty there can be selling and volatility.”

According to preliminary data, the S&P 500 gained 12.19 points, or 0.31%, to end at 3,982.23 points, while the Nasdaq Composite gained 72.14 points, or 0.63%, to 11,467.08. The Dow Jones Industrial Average rose 72.46 points, or 0.22%, to 32,889.38.

Last week, the Dow Industrials fell by the biggest weekly percentage since September, and the S&P 500 and Nasdaq had their biggest weekly percentage fall since December as economic data and comments from U.S. Federal Reserve officials heightened expectations the central bank will become more aggressive in raising interest rates.

Economists at UK-based banks Barclays and NatWest believe the Fed could ramp up the pace of its interest-rate rises in March with a half-point hike. Morgan Stanley said it no longer sees a cut by the Fed this year and expects a slower pace of 25 basis points when the central bank does begin lowering rates.

Fed funds futures show traders are pricing in a third 25 bps hikes this year and see rates peaking at 5.4% by September.

Fed Governor Philip Jefferson said he had “no illusion” inflation would quickly fall back to target and was committed to keeping restrictive monetary policy in place for as long as needed.

Data showed new orders for key U.S.-made capital goods increased more than expected in January while shipments of core goods rebounded, suggesting that business spending on equipment picked up.

Easing yields helped growth stocks rebound while Tesla jumped after the electric automaker said its plant in Brandenburg near Berlin was producing 4,000 cars a week, three weeks ahead of schedule according to a recent production plan reviewed by Reuters.

Seagen Inc surged after the Wall Street Journal reported that Pfizer was in early talks to acquire the biotech firm. Pfizer’s shares dipped.

U.S. railroad operator Union Pacific climbed as Chief Executive Lance Fritz said he would step down. Hedge fund Soroban Capital Partners had called for his ouster.

Many of the 11 major S&P 500 sectors rose. Higher crude prices pushed energy to be one of the biggest gainers on the day, and also helped the index halt a losing run at seven. This tied its worst stretch since an eight-session skid in March 2017.

Among the fallers was communication services, which recorded its fifth straight decline, matching another five-loss streak in October. It was weighed by Netflix Inc, which slipped on reports that the streaming service was cutting subscription prices in 30 countries.

Among other stocks, eBay Inc slid after warning of dour demand in the first half of 2023 due to strained consumer spending in the United States and Europe.

Moderna Inc fell after the vaccine maker reaffirmed its annual sales forecast of $5 billion for its COVID-19 vaccines despite its fourth-quarter sales exceeding estimates.

However, Bumble Inc jumped. The owner of the eponymous dating app projected annual revenue growth above market estimates on optimism over rising paying users.

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