S&P 500, Dow, Nasdaq 100 Indexes Trade at New Highs

Barry Adams
22 Jan, 2024
New York City

Benchmark indexes on Wall Street attempted to build on the previous week's gains after the tech stock rally pushed indexes into the positive zone.

The S&P 500, the Dow Jones Industrial Average, and the Nasdaq 100 indexes traded at new intra-day highs as the previous week's tech rally continued in the new week. 

The S&P 500 index and the Nasdaq Composite index gained sharply in Friday's trading after AI-related enthusiasm led semiconductor stocks to new highs.

Investors have shifted their attention to the latest data on the economy, labor market, and inflation after weeks of debating about the number and timing of rate cuts this year.

The S&P 500 index jumped to a new intraday and end-of-day high after two years in Friday's trading.

Last week, U.S. market indexes advanced amid heightened volatility, and investors focused on a slew of positive economic data in the last two weeks.

Moreover The retail sales report in December signaled resilient consumer spending, adding to the strong labor market conditions and weakening inflation level reported in the previous two weeks and providing another lift to market indexes.

However, existing home sales dropped to a 13-year low in December amid high home prices and elevated mortgage rates as buyers struggled to find properties.

On the international front, the Bank of Japan is scheduled to announce its rate decision on Tuesday, and the European Central Bank is set to announce its monetary policy details on Thursday.

Both central banks are expected to hold rates steady, and the People's Bank of China held its reference rates steady today.

The central bank left its one-year loan prime rate at 3.45% and the 5-year reference rate used for mortgage loans at 4.2%.

The ongoing property market woes and the lack of strong policy action from the People's Bank of China pushed the Hang Seng index down more than 2% and extended 2024 losses to 10%.

 

U.S. Indexes and Yields

The S&P 500 index increased 0.3% to 4,855.85, and the Nasdaq Composite rose 0.5% to 15,381.77.

The yield on 2-year Treasury notes increased to 4.39%. 10-year Treasury notes advanced to 4.09%, and 30-year Treasury bonds edged up to 4.30%.

WTI crude oil increased $1.54 to $74.78 a barrel, and natural gas prices decreased 12 cents to $2.38 a thermal unit.

Gold decreased by $6.10 to $2,022.99 an ounce after declining in the previous week following the general strength in the U.S. dollar.

The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.13.

 

U.S. Stock Movers

Sunoco declined 6.2% to $55.77 after the automotive fuel distributor agreed to acquire NuStar Energy, in an all-equity transaction valued at $7.3 billion.   

NuStar soared 20% to 15.9% to $20.91. 

NuStar common unitholders will receive 0.4 Sunoco common units for each NuStar common unit, implying a 24% premium based on the 30-day volume-weighted average price of both NuStar and Sunoco as of January 19, 2024. 

Sunoco has secured a $1.6 billion one-year bridge term loan to refinance NuStar's purchase and assume its debt. 

Boeing decreased 1.3% to $212.15 after the Federal Aviation Administration expanded its inspection of door plug design on the 737 900-ER.

The FAA ordered an investigation after, earlier in the month, a 737 Max 9 plane used by Alaska Air Flight blew off a door midflight.

The government agency expanded the probe from the 737 Max 9 because the same door plug design is used in the 737 900-ER model.

Macy's Inc. increased 4.3% to $18.39 after the department store chain rejected a $5.8 bid by a consortium of investors, citing the offer was not financially attractive and lacked credible financing.

Ark House and Brigade Capital Management proposed to acquire shares in the company for $21 per share.

Archer Daniels-Midland plunged 15% to $58 after the company said it placed its chief financial officer, Vikram Luthra, on administrative leave amid an accounting practices investigation.

The company also offered a weaker-than-expected fourth-quarter earnings outlook.

 

European Markets Cautiously Advance Ahead of ECB Rate Decision 

European markets advanced, and investors debated the rate path and economic outlook in the current year.

Benchmark indexes in Frankfurt, London, and Paris gained, and investors looked ahead to the rate decision from the European Central Bank on Thursday.

In Friday's trading, market indexes in New York jumped more than 1%, and the tech-heavy Nasdaq Composite index soared 1.7% after investors bid up semiconductor and mega-cap tech stocks.

In Monday's trading in Europe, ASML gained 1.5% and Infineon added 1.0%.

Last week, European markets declined between 1% and 2% after the European Central Bank’s policymakers pushed back aggressively against the market's enthusiasm for rate cuts in the near future.

Moreover, Germany, the largest economy in the eurozone, reported that GDP contracted in 2023, keeping the prospect of a recession alive.

However, passenger car registration rose 14% to 10.5 million in 2023 in the European Union despite rising interest rates and consumers avoiding discretionary items amid elevated inflation.

The European Central Bank is widely anticipated to hold rates steady at the end of its policy meeting on Thursday, and policymakers are likely to stress that inflation is too high and that higher rates for longer are still needed to bring down inflation to the target rate of 2%.

 

Europe Indexes and Yields

The DAX index increased 0.7% to 16,669.22, the CAC-40 index rose 0.6% to 7,415.68, and the FTSE 100 index inched up 0.4% to 7,492.27.

The yield on 10-year German bonds edged down to 2.26%; French bonds inched lower to 2.81%; the UK gilts edged lower to 3.89%; and Italian bonds inched lower to 3.84%.

The euro edged lower to $1.089, the British pound inched higher to $1.270, and the U.S. dollar gained to 86.80 Swiss cents.

Brent crude advanced $1.37 to $79.97 a barrel, and the Dutch TTF natural gas decreased by €1.15 to €27.28 per MWh.

 

Europe Stock Movers

Credit Agricole added 0.7% to €13.32 after the French bank said it acquired a minority 7% stake in payment and transaction processing services provider Worldline SA.

The terms of the transaction were not disclosed.

Kindred Group PLC jumped 16.7% to kr121.85 after the online gambling company confirmed it received a takeover proposal from La Francaise des Juex, valuing the company at €2.45 billion.

Bodycote PLC jumped 4.3% to 621.75 pence after the heat treatment and thermal processing company provider said it plans to repurchase up to £60 million of its own shares.

Endeavour Mining PLC decreased 1.7% to 1,360.0 pence, despite the gold mining company estimating 2024 production to increase by 18%.

SDI Group PLC dropped 7.4% to 75.0 pence after its chief executive, Mike Creedon, stepped down on January 19.

Sandoz Group AG gained 1.9% to CHF 28.56 after the Swiss generic and biosimilar medicine maker announced to acquire ranibizumab CIMERLI from Coherus BioSciences, Inc. for an initial payment of $170 million with additional milestone-based payments.

The drug is used to treat macular degeneration in the retina, leading to progressive loss of vision.

 

Asia: Nikkei Tracks U.S. Stocks Higher, Hang Seng Extends 2024 Losses to 10%

Asian markets diverged in Monday's trading in a familiar pattern, with the indexes in Japan trading higher following the gains in New York and foreign investors accelerated sale of Chinese stocks.

Market indexes in Japan advanced following the rise in tech stocks in New York, and in China, investors continued selling stocks after the People's Bank of China held its 1-year and 5-year rates as expected.

The Nikkei index in Tokyo advanced 1.5% to 36,517.84, another new 34-year high, after tech stocks powered the rally following a rise in New York in overnight trading.

SoftBank advanced 2%, Fast Retailing gained more than 1%, Toyota Motor gained 0.5%, and Honda Motor advanced 1.6%.

Tech sector stocks were among the leading gainers, with Tokyo Electron, Advantest, and Screen Holding gaining between 2% and 4%.

Mitsubishi UFJ Financial, Sumitomo Mitsui Financial, and Mizuho advanced between 0.3% and 1%.

The Bank of Japan is widely anticipated to hold its reference rate and yield curve policy intact on Tuesday. 

 

China Stocks Extend Losses, Hang Seng Down 10% In 2024

The one-year loan prime rate was held steady for the fifth month in a row at 3.45%, and the 5-year loan prime rate used for mortgage rates was maintained for the seventh month in a row at 4.2%.

The Hang Seng index declined 2% to 14,932.18 in Monday's trading after the central bank failed to announce stimulus measures to revive the moribund property market.

The Hang Seng index is down more than 10% from the start of the year, its worst performance in January since 2016.

Baidu declined 3.5%, Tencent fell 2.5%, BYD declined 1.9%, and Li Ning dropped 6.5%.

Foreign investors continue to sell China stocks, keeping pressure on China indexes, as the government shows no sign of offering additional economic stimulus and consumer spending growth remains weak after the ending of COVID-19 restrictions.

So far in 2024, foreign investors have sold more than $4 billion of Chinese stocks, extending the total sale to $26 billion in the last six months, according to data available from Stock Connect.

 

India Stocks Advanced In Special Session On Saturday

Stocks in Mumbai advanced on Saturday in a special session, and financial markets are closed Monday to celebrate Ram Mahotsav.

The Sensex index gained 0.3% and the Nifty index advanced 0.5% in a shortened session on Saturday following the surge in overnight trading in New York.

The S&P 500 index jumped more than 1% and the Nasdaq Composite gained 1.7% after mega-cap tech stocks rebounded and investors overlooked rate path uncertainties.

Investors bid up stocks of banks, tech and financial services providers, and automotive sector stocks.

The Sensex index increased 236.79 points to 71,423.65, and the Nifty index rose 109.55 points to 21,571.80.

On the Mumbai stock exchange, 474 stocks traded at their 52-week highs and 9 stocks traded at their 52-week lows.