Wall Street surges fueled by tech rally

Wall Street surges fueled by tech rally

  • Baker Hughes falls on missing Q4 earnings estimates
  • Activist investor Elliott Management takes a stake in Salesforce
  • Chips on course for biggest daily gain since Nov
  • Indexes up: Dow 0.98%, S&P 1.41%, Nasdaq 2.09%,

NEW YORK, Jan 23 (Portal) – Wall Street surged Monday, led by technology stocks, as investors kicked off a profitable week with renewed enthusiasm for market-leading momentum stocks that took a beating last year.

All three major stock indices continued Friday’s rally, gaining momentum throughout the day. The tech-heavy Nasdaq led, helped by a 4.9% gain in semiconductor stocks (.SOX).

“This is a remarkable rally in many of the names that underperformed last year,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. “Nobody wants to sit on the sidelines with a bunch of money and watch the market outrun them.”

The session marks a calm before the storm in a week packed with high-profile earnings reports and back-end loaded with crucial economic data.

Investors are all but certain that the Federal Reserve will deliver a bite-sized rate hike next week, even as the Federal Reserve remains determined to tame the hottest inflation cycle in decades.

According to CME’s FedWatch tool, at the end of next Wednesday’s two-day monetary policy meeting, financial markets have priced in a 99.8% chance of a 25 basis point hike in the Fed’s benchmark interest rate.

The Dow Jones Industrial Average (.DJI) was up 328.17 points, or 0.98%, to 33,703.66, the S&P 500 (.SPX) was up 55.93 points, or 1.41%, to 4,028.54 and the Nasdaq Composite (.IXIC) was up 232.84 points, up 2.09% at 11,373.28.

All 11 major sectors in the S&P 500 were higher, with technology (.SPLRCT) leading the way, up 2.8%.

The fourth quarter earnings season has entered into overdrive, with 57 of the companies in the S&P 500 reporting results. Of those, 63% had better-than-expected gains, according to Refinitiv.

Analysts now expect fourth-quarter earnings for the S&P 500 to fall 3% year over year overall, nearly double the 1.6% annual decline earlier in the year, according to Refinitiv.

This week Microsoft Corp (MSFT.O) and Tesla Inc , along with a flurry of industrial hard hitters including Boeing CO (BA.N), 3M Co (MMM.N), Union Pacific Corp (UNP.N) Dow Inc ( DOW.N), Northrop Grumman Corp (NOC.N), are expected to report quarterly earnings.

Tesla Inc (TSLA.O) rose 7.8% as Chief Executive Elon Musk commented on his fraud case related to a tweet saying he had support to privatize the electric carmaker.

Baker Hughes Co (BKR.O) missed quarterly earnings estimates on inflationary pressures and ongoing disruptions from Russia’s war against Ukraine. Shares of the oilfield services company lost 0.9%.

Cloud-based software company Salesforce Inc (CRM.N) rose 3.1% after it was announced that activist investor Elliot Management Corp took a multi-billion-dollar stake in the company.

Spotify Technology SA (SPOT.N) joined the growing list of tech-related companies to announce upcoming job cuts and shed 6% of its workforce as rising interest rates and the looming possibility of a recession continue to weigh on growth stocks. Shares of the music streaming company rose 2.1%.

On the economic front, the Commerce Department is expected to release its first “forward-looking” estimate of fourth-quarter GDP on Thursday, which analysts expect will land at 2.5%.

On Friday, the wide-ranging Personal Consumption Expenditures (PCE) report is expected to provide insight into consumer spending, income growth and most importantly, inflation.

Rising issues predominated on the NYSE at a 3.53 to 1 ratio; on the Nasdaq, a 1.95 to 1 ratio favored movers.

The S&P 500 posted 11 new 52-week highs and no new lows; the Nasdaq Composite posted 66 new highs and 14 new lows.

Reporting by Stephen Culp; Additional reporting by Shreyashi Sanyal and Johann M. Cherian in Bengaluru Editing by Marguerita Choy

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