Dow rises to new record, but Nasdaq falls nearly 2% as higher rates divide the m

Started by OZER, Jan 04, 2022, 07:59 PM

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The Dow Jones Industrial average rose for a second day to start 2022 as investors bet on the kinds of stocks that would benefit from a robust economy this year despite the omicron threat.

But a continuing spike in bond yields to start the new year caused investors to rotate out of tech stocks, sending the Nasdaq lower. Losses in tech shares that were big winners last year like Nvidia and Tesla weighed on the broader market.

The Dow rose 181 points, or about 0.5%, and hit an intraday record on Tuesday. The S&P 500 also reached an intraday record, before turning lower as tech shares fell. It was last down 0.3%. The Nasdaq Composite shed 1.8% on the losses in tech shares.

Investors this week have been betting the economy could overcome the latest surge in Covid cases, which  topped 1 million in the U.S. on Monday. That optimism boosted interest rates and divided the stock market on Tuesday.

On the winning side in the session were stocks like banks, which stand to benefit from the rise in rates. JPMorgan Chase, American Express and Goldman Sachs were among the biggest gainers in the Dow.

Caterpillar and other stocks linked directly to the economic recovery also boomed. Energy shares like Occidental Petroleum and Coterra Energy added 7%. Halliburton shares jumped 5% as crude prices rose and Morgan Stanley upgraded the oil services company.

Ford Motor was the biggest gainer in the S&P, up more than 11% after the company opened orders this week for its F-150 Lightning electric pickup truck, which it had previously shut down due to an overwhelming response. The company also announced plans to nearly double its production plan to 150,000 annually.

On the losing side in the session were tech names with high valuations as investors rotated out of that sector as rates increased. Tesla, fell about 5% after jumping 13% on Monday and ending 2021 with a roughly 8.5% gain. Nvidia fell Tuesday by 4.4%. Cloud companies CrowdStrike and Okta lost 5%.

Bond yields jumped for a second day as investors digested growing evidence that the omicron variant of Covid-19 may be less of a material drag on global growth that many initially anticipated.

"We believe there is further upside for stocks, despite a strong run so far," wrote JPMorgan equity strategists led by Mislav Matejka in a note Tuesday. "The new variant is proving to be milder than the prior ones."

"We continue to see gains for earnings, and believe that consensus projections for 2022 will again prove too low," they added.

Elsewhere, cruise operators continued their rebound, with shares of Carnival Corp and Norwegian Cruise rising roughly 2%. Airline stocks were also higher as part of the reopening trade. American and United Airlines rose about 2%.

The major averages rose Monday to start the new year, with the Dow and S&P 500 notching record closing highs. The Nasdaq also gained more than 1%, led by Tesla's jump and Apple climbing. The iPhone maker on Monday became the first company to reach a market cap of $3 trillion.

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Even  has seen the tide turning. I've been predicting a late jan demolishing since the beginning of 2021. after a dopey x mas rally n early jan rally, it'll descend. Wild swings is just the precursor. It means they are running out of buyers, and so they need wild swings to create set ups to rally more often than usual. This is not the beginning or middle of a bull run.

Tesla may be a bubble what a joke Tesla and Elon Musk are on a whole other level. Tesla is the biggest robotic company in the world. The solar, dojo, software among many other sectors. 2022 will see a other 50 percent in stock price rising.

It is clear that crypto CEOs should be running our financial system.

Inflation crisis can be solved it depends on the monetary  policy structures use. Since inflation is described as too money running ahead of fewer goods. May be the government want to solve the deficit problems,and solve the issues of the import of goods &services.

Excellent forum, crypto is moving in the right direction.  Buying the dip again today.

when they want some kind of news to spread they interview somebody precise, it's kind to give out the responsability of the wrong forecast somehow. This is absolutely the wrong channel to watch if you want to understand about markets. Or just do the opposite.

Black Americans need the government funding to start business and they know help black Americans become owners

This whole "transitory" BS is ridiculous. Once the prices of cars, rents, or food go up they never go back down and when they rise faster than wages it hurts the poor and those on fixed incomes the most.