U.S. Major Stock Averages Trade Near Record Levels, Treasury Yields Hovers at 2-month High

Barry Adams
12 Feb, 2024
New York City

Benchmark indexes hovered near the flatline amid optimism about economic growth, accommodating labor markets, and positive corporate earnings.

Last week, U.S. stock markets continued to pull ahead following strong earnings, dovish monetary policy, and a resilient economy.

The S&P 500 index traded above 5,000 for the first time after reaching 4,000 on April 2, 2021.

Benchmark indexes extended weekly gains for the fifth week in a row after December’s U.S. consumer price inflation was revised slightly lower in a busy week of earnings.

last week, market sentiment was also bolstered following the decline in the U.S. trade deficit in 2023 after weak energy prices drove the decline in imports at a faster pace than the rise in exports.

This week the earnings season is entering into its fourth week, with leading companies including Airbnb, Applied Materials, Auto Nation, Cisco, Coca-Cola, Deere, DoorDash, Instacart, Kraft Heinz, and Lyft set to announce their results.

Moreover, economists are looking to review the release of January consumer price inflation on Tuesday, retail trade and industrial production data on Thursday and the producer price index on Friday.

 

U.S. indexes and yields

The S&P 500 index decreased 0.03% to 5,031.07, and the Nasdaq Composite fell 0.03% to 15,841.08.

The yield on 2-year Treasury notes decreased to 4.46%, 10-year Treasury notes eased to 4.15%, and 30-year Treasury bonds edged up to 4.36%.

WTI crude oil decreased $0.75 to $76.12 a barrel, and natural gas prices declined 1 cent to $1.83 a thermal unit, a low last seen in September 2020.

Gold decreased by $2.82 to $2,021.26 an ounce and extended the previous week's gains after the U.S. dollar gained in international trading.

The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.14.

 

U.S. Stock Movers

Diamondback Energy rose 3.1% to $156.36 after the company agreed to merge with Endeavor Energy Partners in a deal worth $26 billion.

After the completion of the deal, Diamondback shareholders are expected to hold 60.5% stake in the merged entity, and Endeavor shareholders are expected to hold the remaining stake.

After the merger, Diamondback will be the largest independent and third-largest shale gas producer in the Permian Basin, Texas, following Exxon Mobil and Chevron.

Endeavor Energy Partners is the largest independent shale gas producer in the prolific shale gas field in the Permian Basin, spanning western Texas and eastern New Mexico.

The merged company anticipated pumping 816,000 barrels of oil equivalent per day and saving annual operating costs by $550 million.

Diamondback said the Endeavor deal is expected to close in the fourth quarter.

The merger between Diamondback and Endeavor follows the largest deal in Permian region after Exxon Mobil announced to acquire Pioneer Natural Resource for $60 billion in late 2023.