Yahoo Finance Stock Market News for Feb 2, 2023
U.S. markets closed higher on Wednesday after a choppy session. Investors were assessing as the Fed further reduced the magnitude of interest rate hike. Market participants were also considering a series of mixed economic data and their implications on the U.S. economy. All three major stock indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 6.92 points to close at 34,092.96. At intraday low, the bule-chip index was down more than 500 points, marking its best single-day reversal since Oct 13. Notably, 21 components of the 30-stock index ended in positive territory while 9 in negative zone.
The tech-heavy Nasdaq Composite finished at 11,816.32, jumping 2% or 231.77 points due to strong performance of large-cap technology stocks. The tech-laden index recorder highest closing since September 2022.
The major gainer of the Nasdaq Composite was Baidu Inc. BIDU as its stock price advanced 13.1%. Baidu carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The S&P 500 gained 1% to end at 4,119.21. At intraday low, the broad-market index was down nearly 1%, marking its best single-day reversal since Oct 13. Ten out of 11 broad sectors of the benchmark index closed in positive territory while one in red. The Consumer Discretionary Select Sector SPDR (XLY) and the technology Select Sector SPDR (XLY) were up 1.9% and 2.4%, respectively. On the other hand, the Energy Select Sector SPDR (XLE) was down 2%.
The fear-gauge CBOE Volatility Index (VIX) was down 7.9% to 17.87. A total of 13.7 billion shares were traded on Wednesday, higher than the last 20-session average of 11.50 billion. Advancers outnumbered decliners on the NYSE by a 2.86-to-1 ratio. On Nasdaq, a 2.28-to-1 ratio favored advancing issues.
Fed Reduces Magnitude of Interest Rate Hike
In its February FOMC meeting, the Fed hiked the benchmark interest rate by 25 basis points to the range of 4.50% to 4.75%, marking its highest rate since late 2007. Fed Chairman Jerome Powell said “We can now say I think for the first time that the disinflationary process has started. However, it would be very premature to declare victory or to think we really got this.”
Powell categorically denied any possibility of a rate cut in 2023. “Inflation data received over the past three months show a welcome reduction in the monthly pace of increases,” Powell said in post-FOMC news conference. “And while recent developments are encouraging, we will need substantially more evidence to be confident that inflation is on a sustained downward path.”
However, the market applauded Powell’s recognition that the disinflationary process has started. A lower interest rate and a lighter monetary control will be good for growth sectors like technology and consumer discretionary.
Economic Data
The Department of Labor in its Job Openings and Labor Turnover Survey (JOLTS) report said that jobs opening increased by 572,000 month over month in December to 11 million. The number of workers quitted jobs in December fell to 4.09 million from 4.1 million in November.
Automatic Data Processing Inc. (ADP) reported private sector payroll increased by 106,000 in January, significantly below an upwardly revised 253,000 job additions in December.
The Institute of Supply Management reported that manufacturing index fell to 47.4% in January from 48.4% in December. The consensus estimate was 48.2%. January marked the third consecutive months of manufacturing contraction after a 28-month of expansionary period. Any reading below 50% indicates contraction in manufacturing activities.
Construction spending in December fell 0.4% compared with the consensus estimate of a decline of 0.1%. November’s data was revised upward to an increase of 0.5% from 0.2% reported earlier.
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