S&P 500 near flat as investors weigh chances of less aggressive rate
hikes
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[January 10, 2023] By
Caroline Valetkevitch
NEW YORK (Reuters) - The S&P 500 index erased early gains to close
nearly flat on Monday as expectations that the Federal Reserve will
become less aggressive with its interest rate hikes were offset by
lingering worries about inflation.
The Dow ended lower, and the Nasdaq Composite ended well off the day's
highs.
Investors are awaiting comments Tuesday from Fed Chair Jerome Powell,
who some strategists expect could say more time is needed to show
inflation is under control.
Money market bets were showing 77% odds of a 25-basis point hike in the
Fed's February policy meeting.
A consumer prices report due Thursday could be key for rate
expectations, said Quincy Krosby, chief global strategist, LPL Financial
in Charlotte, North Carolina. "The CPI report this week is going to be
essential for fine-tuning the Fed funds futures market."
Investors also may have sold some shares after recent strong market
gains, said Paul Nolte, portfolio manager at Kingsview Investment
Management in Chicago. "You're seeing a little bit of profit-taking
ahead of the CPI number due out this week."
The technology sector gained as Treasury yields fell. Consumer
discretionary stocks also rose, with Amazon.com Inc up 1.5% after
Jefferies said it saw cost pressures easing for the e-commerce giant in
the second half of the year.
Also, S&P 500 companies are about to kick off the fourth-quarter
earnings period, with results from top U.S. banks expected later this
week.
The Dow Jones Industrial Average fell 112.96 points, or 0.34%, to
33,517.65, the S&P 500 lost 2.99 points, or 0.08%, to 3,892.09 and the
Nasdaq Composite added 66.36 points, or 0.63%, to 10,635.65.
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Traders work on the trading floor at the
New York Stock Exchange (NYSE) in New York City, U.S., January 5,
2023. REUTERS/Andrew Kelly
Shares of Broadcom Inc fell in late trading to end down 2% after
Bloomberg, citing people familiar with the matter, reported that
Apple Inc plans to drop a Broadcom chip in 2025 and use an in-house
design instead.
Friday's jobs report, which showed a moderation in wage increases,
lifted hopes that the Fed might become less aggressive in its
rate-hike push to reduce inflation.
Tesla Inc shares rose 5.9% after the electric-vehicle maker
indicated longer waiting times for some versions of the Model Y in
China, signaling the recent price cuts could be stoking demand.
Macy's Inc fell 7.7% and Lululemon Athletica Inc dropped 9.3% after
both retailers issued disappointing holiday-quarter forecasts.
Volume on U.S. exchanges was 11.35 billion shares, compared with the
10.90 billion average for the full session over the last 20 trading
days.
Advancing issues outnumbered decliners on the NYSE by a 1.85-to-1
ratio; on Nasdaq, a 1.48-to-1 ratio favored advancers.
The S&P 500 posted 13 new 52-week highs and two new lows; the Nasdaq
Composite recorded 129 new highs and 32 new lows.
(Additional reporting by Shubham Batra, Amruta Khandekar and Ankika
Biswas in Bengaluru; Editing by Shounak Dasgupta and Richard Chang)
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