Sector Investing

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Market Snapshot

https://www.briefing.com/stock-market-update

Dow 36252.02 +183.15 (0.51%)
Nasdaq 15153.45 +210.62 (1.41%)
SP 500 4713.04 +42.75 (0.92%)
10-yr Note 0/32 1.765
NYSE Adv 2392 Dec 849 Vol 852.8 mln
Nasdaq Adv 3048 Dec 1404 Vol 4.3 bln

Industry Watch
Strong: Energy, Information Technology, Materials
Weak: Utilities, Real Estate, Consumer Staples

Moving the Market

-- Stocks extend rebound bid following Fed Chair Powell's Senate confirmation hearing

-- Treasury yields calmed down

-- S&P 500 reclaims 50-day moving average (4678)

Stocks extend rebound bid following Powell's confirmation hearing
11-Jan-22 16:15 ET
Dow +183.15 at 36252.02, Nasdaq +210.62 at 15153.45, S&P +42.75 at 4713.04

[BRIEFING.COM] The S&P 500 gained 0.9% on Tuesday in a continuation of dip-buying efforts that started yesterday afternoon. The Nasdaq Composite (+1.4%) and Russell 2000 (+1.1%) outperformed with gains over 1.0% while the Dow Jones Industrial Average (+0.5%) rose more modestly.

The session started on a softer note as buyers held off conviction for Fed Chair Powell's Senate confirmation hearing. Mr. Powell didn't say anything particularly new, reaffirming that he thinks the Fed will end asset purchases in March, hike rates over the course of the year, and allow the balance sheet to run off later in the year.

The reaction in the Treasury market was perhaps more consequential for stocks. The 2-yr yield quickly backed down from 1.94% and settled unchanged at 0.90% while the 10-yr yield drifted lower by three basis points to 1.75%. The U.S. Dollar Index fell 0.4% to 95.62.

The S&P 500 information technology (+1.2%) led the market higher with the retracement in yields, but it was outdone by the 3% gain in the energy sector (+3.4%). Energy stocks followed oil prices ($81.14, +3.03, +3.9%) higher.

Conversely, the utilities (-0.9%), real estate (-0.2%), and consumer staples (-0.1%) sectors closed lower, as their defensive characteristics did not sit well with investors in the rebound-minded session.

From a technical perspective, the ability for the S&P 500 to reclaim its 50-day moving average (4678) was seen as another good development for dip-buying activity. This key technical level has shown to be a good buying opportunity since April 2020.

Looking at individual stocks, IBM (IBM 132.87, -2.16, -1.6%) was an exception in the tech sector after receiving a downgrade to Sell from Neutral at UBS. Illumina (ILMN 423.80, +61.52, +17.0%) jumped 17% on upbeat guidance while CVS Health (CVS 106.04, +0.98, +0.9%) set a 52-week high after raising its FY21 EPS guidance above consensus.

Tuesday's economic data was limited to the NFIB Small Business Optimism Index, which December increased to 98.9 in December from 98.4 in November.

Looking ahead, investors will receive the Consumer Price Index for December, the Fed's Beige Book for January, the Treasury Budget for December, and the weekly MBA Mortgage Applications Index on Wednesday.

Dow Jones Industrial Average -0.2% YTD
S&P 500 -1.1% YTD
Russell 2000 -2.3% YTD
Nasdaq Composite -3.1% YTD

Crude futures settle 4% higher
11-Jan-22 15:30 ET
Dow +192.81 at 36261.68, Nasdaq +203.98 at 15146.81, S&P +41.25 at 4711.54

[BRIEFING.COM] The S&P 500 is up 0.8% and is looking up to the Nasdaq (+1.3%) and Russell 2000 (+1.1%).

One last look at the sector performances shows energy in a league of its own with a 3.5% gain, largely due to a 4% gain in oil prices ($81.49, +3.26, +4.2%). The information technology sector (+1.2%) follows behind with a 1.2%, while the utilities (-0.8%) and consumer staples (-0.3%) sectors trade lower.

WTI crude futures settled higher by 3.9%, or $3.03, to $81.14/bbl.