Tech Rally Lifts Nasdaq 3%, China Worries Drags Down Crude Oil 2%

Barry Adams
29 Dec, 2022
New York City

Major averages on Wall Street staged a turnaround and tech stocks led the advance. 

Crude oil prices dropped 2% on the worries that the end of zero-Covid policy in China may lead to the spread of highly infectious viruses around the world and spark another economic slowdown. 

Investors also reviewed the rise in weekly jobless claims and continuing claims rose to the level last seen in February. 

 

Indexes In Review 

Tech stocks led the rebound on Wall Street and supported the advance in the S&P 500 index and the Nasdaq Composite. 

Investors set aside the worries of higher rates and earnings shortfall and stepped up to buy high growth stocks and search for bargains in the beaten down tech and energy stocks. 

Early in the week market indexes traded lower on the looming recession and earnings slowdown worries but  

The S&P 500 index increased 1.6% to 3,842.70 and the Nasdaq Composite index rose 2.6% to 10,473.57. 

Crude oil declined 2.2% to $77.19 a barrel and natural gas eased 18 cents to $4.50 a thermal unit. 

The yield on 2-year Treasury notes declined to 4.37%, 10-year Treasury notes eased to 3.86% and 30-year Treasury bonds edged lower to 3.94%. 

 

Weekly Jobless Claims 

Seasonally adjusted Initial jobless claims rose 9,000 to 225,000 in the week ending on December 25 and four-week average was little changed at 221,000, according to the latest data from the Department of Labor.

The previous week's average was revised down by 500 from 221,750 to  221,250.

Continuing claims increased to 1.71 million in the week ending on December 17th, the highest level since February. 

 

U.S. Stock Movers 

Tech stocks rally lifted Apple Inc 3.1% to $129.96 and Tesla Inc 8.8% to $122.65. 

General Electric Company increased 0.6% to $82.46 and the spinoff GE HealthCare Technologies will be added to the S&P 500 index after it begins trading as a separate company on January 4. 

Vornado Realty and RXO will be reassigned to different indexes after the GE HealthCare addition.  

Vornado Realty Trust advanced 1.9% to $21.30  after the real estate company was assigned from the S&P 500 index to the S&P MidCap 400 index.      

RXO Inc soared 6.4% to $17.40 after the logistics company will be moved to the S&P 600 index from the S&P 400 MidCap Index. 

Lockheed Martin increased 0.6% to $486.28 after the largest defense contractor's Sikorsky unit said it plans to challenge the recent U.S. Army $1.3 billion contract award to Textron. 

Textron Inc advanced 1.0% to  $70.61. 

Southwest Airlines Co increased 3.4% to $33.30 and the discount carrier remained in focus after the company canceled thousands of flights over the holiday weekend and struggled to resume its normal schedule. 

Cal-Maine Foods Inc plunged 11.9% to $54.75 after the egg producer's quarterly results were below analysts' expectations. 

The company has been struggling with egg production after the recent outbreak of avian flu and the egg company said there were no positive tests for avian flu at its manufacturing facilities. 

The USDA division of Animal and Plant Health Inspection Service reported on December 27, 2022, that approximately 43.3 million commercial layer hens and 1.0 million pullets have been "depopulated" due to HPAI or avian flu this year. 

Revenue in the fiscal second quarter ending in November soared 110% to $801.7 million from a year ago after egg prices soared. 

Net income in the quarter rose to $198.6 million from $1.2 million and diluted earnings per share increased to $4.07 from 2 cents a share a year ago.