Wall Street Indexes Approach Record Highs as Tech Stocks Rebound

Alexander Garcia
06 Jan, 2025
Miami

Wall Street indexes advanced in Monday's trading amid positive investor sentiment and economic outlook. 

The S&P 500 index and the Nasdaq Composite jumped more than 1% as investors awaited the start of earnings season and banks and tech stocks were in focus. 

Advanced chipmakers traded higher after Taiwan-based Foxconn reported a strong increase in revenue in the December quarter, driven by a continued increase in demand for artificial intelligence servers. 

New factory orders declined 0.4% from the previous month to $586.1 billion in November, the U.S. Census Bureau reported  Monday. 

Orders for October were revised to $588.2 billion, an increase of 0.5% form the previous month. 

Durable goods orders, declined in three of the last four months, fell 1.2% from the previous month to $287.8 billion and non-durable goods edged up 0.4% to $301.4 billion.  

This week investors are looking forward to the release of the international trade balance for November and job openings and non-farm payrolls reports for December.

Bond yields are likely to trade volatile as investors await the release of the JOLT report on Tuesday, ADP's private payrolls update on Wednesday, and the non-farm payroll report on Friday.

The New York Stock Exchange will be closed Thursday to mourn the death of former President Jimmy Carter. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index increased 1.2% to 6,015.70, the Nasdaq Composite rose 1.80% to 19,974.45, and the Russell 2000 index inched up by 0.7% to 2,283.89. 

The yield on 2-year Treasury notes edged higher to 4.26%, 10-year Treasury notes inched up to 4.59%, and 30-year Treasury bonds increased to 4.81%.

WTI crude oil increased $0.08 to $74.04 a barrel, and natural gas prices edged up 21 cents to $3.67 a thermal unit.

Gold decreased by $0.32 to $2,637.96 an ounce, and silver rose by $0.52 to $30.13. 

The dollar index, which weighs the US currency against a basket of foreign currencies, decreased by 1.18 to 107.87 and traded at a two-year high. 

 

U.S. Stock Movers 

Foxconn said revenue in the December quarter increased 15.2% to NT $2.13, or $64.7 billion. and in December jumped 42.3% to NT$654.8 billion. 

The company said it will release full fourth-quarter financial statements on March 14. 

Nvidia, Broadcom, and Micron Technology advanced between 2% and 4%, following Foxconn's fourth quarter sales update. 

 

European Stock Market Indexes Moderately Higher After Business Activities Improved In December 

Stock market indexes in the eurozone advanced in Monday's trading, and investors reacted to the latest updates on the manufacturing and services activities. 

Benchmark indexes in Frankfurt, Paris, and Milan advanced, but in London eased as investors reacted to weak but improving business activities.

The HCOB Germany Composite PMI improved to 48.0 in December from 47.2 in November, said S&P Global in a report released on Monday. 

The HCOB France Composite PMI was revised to 47.5 in December from the preliminary estimate of 46.7 and from a ten-month low of 45.9 in November, said S&P Global in a separate report on Monday. 

The Euro Area's Composite PMI advanced to 49.6 in December from 48.30 in November, S&P Global said in a separate report on Monday.

Service sector activities picked up growth in the eurozone, Germany, and France in December. 

Services PMI in the eurozone increased to 51.6 from 49.6; in Germany it rose to 51.30 from 49.20, and in France to 49.30 from 46.90 in the previous month, respectively. 

 

Europe Indexes and Yields

The DAX index increased by 1.4% to 20,186.24; the CAC-40 index rose by 2.1% to 7,436.55; and the FTSE 100 index inched higher by 0.2% to 8,236.19. 

The yield on 10-year German bonds edged higher to 2.43%, French bonds rose to 3.27%, the UK gilts decreased to 4.60%, and Italian bonds rose to 3.58%.

The euro edged lower to $1.033; the British pound inched down to $1.246; and the U.S. dollar strengthened to 90.64 Swiss cents.

Brent crude increased $0.08 to $76.59 a barrel, and the Dutch TTF natural gas fell by €2.21 to €47.40 per MWh. 

 

Europe Stock Movers

Automobile makers advanced in Frankfurt and Paris, and luxury stocks in Paris rebounded from last week's weakness. 

Volkswagen AG gained 3.4% to €89.74, Mercedes-Benz Group jumped 4.2% to €54.56, and Porsche Automobil Holding SE advanced 3.2% to €37.09. 

Hermes International gained 3.4% to €2,312.0, LVMH Moet Hennessy increased 3.4% to €632.0, and Kering SA added 2.4% to €231.0. 

BNP Paribas SA gained 2.9% to €59.97, Societe Generale increased 3.3% to €27.41, and UniCredit SpA advanced 1.2% to €38.79.

 

Japan's Benchmark Indexes Dropped 1%, Toyota's U.S. Sales Struggled In December 

Stock market indexes in Tokyo closed down in Monday's trading after investors returned from a weeklong holiday. 

The Nikkei 225 stock average decreased 1.5%, and the broader TOPIX index dropped 1% as investors worried about the rate path and domestic political uncertainties. 

The Nikkei 225 stock average advanced 19.2%, and the TOPIX index gained 17.7%, and both indexes advanced for the second year in a row. 

Market sentiment remained cautious on the first trading session of 2025 amid worries about the stability of the domestic minority government, a potential increase in U.S. tariffs on Japanese goods, and rising competition from Chinese electric vehicle makers.

 

Japan Stock Movers 

The Nikkei 225 Stock Average declined 1.5% to 39,307.08, and the broader TOPIX index fell 1% to 2,755.44. 

Technology stocks, financial services providers, and retailers lacked momentum in Tokyo trading. 

Tokyo Electron Ltd. increased 0.5% to ¥24,305.0, Advantest Corp. added 1% to ¥24,305.0, and Screen Holdings advanced 1.3% to ¥9,611.0. 

Toyota Motor declined 4.4% to ¥3,008.0 after the vehicle maker reported a decline in sales in the final quarter in the U.S. 

The company reported fourth quarter sales of 603,104 vehicles, a decrease of 2.7% on a volume basis and a decrease of 5.2% on a daily sales rate basis compared to the fourth quarter of 2023. 

December 2024 U.S. sales totaled 209,953 vehicles, a decrease of 7.1% on a volume basis and a decrease of 3.4% on a DSR basis compared to December 2023.

Toyota Motor North America sales increased 3.7% to 2,332,623 vehicles on a volume basis and an increase of 3.1% on a daily selling rate, or DSR basis, compared to 2023.

Lexus division reported its best-ever annual sales in its 35-year history. 

Nippon Steel Corp. declined 0.4% to ¥3,160.0 after U.S. President Joe Biden blocked the company's $15 billion deal to acquire the Pittsburgh-based U.S. Steel. 

Nippon Steel president Tadashi Imai said the company is reviewing its options, including suing the U.S. government for blocking its acquisition. 

Fast Retailing Co. Ltd. dropped 4.2% to ¥51,560.0, and Seven I Holdings declined 1.9% to ¥2,439.50 ahead of their earnings reports. 

Dai-ichi Life Holdings decreased 0.05% to ¥4,233.0 after the insurance company took a loss of ¥140 billion after it sold ¥500 billion Japanese government notes with maturities of 20 and 40 years, in the fiscal-half ending in September. 

 

China Policy Officials and PBoC Governor Vow to Offer More Stimulus Support 

Investor sentiment in China and Hong Kong remained subdued amid worries of ongoing economic growth deceleration and lack of corporate earnings growth. 

The Hang Seng index declined 0.4%, and the mainland-focused CSI 300 index dropped 0.2% amid fading hopes of imminent steps by Beijing to revive consumer spending. 

Over the weekend the People's Bank of China announced its plans to offer more liquidity support for the purchase of stocks to institutional investors. 

The country's top economic planner said that China plans to expand its trade-in program to cover industrial equipment, computer devices, and other electronic items.

In 2025, China's trade-in program will cover many industrial equipment categories and personal computing devices funded by long-term bonds, said Yuan Da, deputy secretary general of the National Development and Reform Commission, at a press conference held on Friday. 

As of August, Beijing had distributed 150 billion yuan, or about $21 billion, to local governments to subsidize purchases of home appliances and electric vehicles. 

However, the trade-in program is likely to be less effective in 2025 amid waning demand for durable goods and falling retail sales in Beijing and Shanghai. 

Leaders of the Shanghai and Shenzhen stock exchanges confirmed that they recently held meetings with foreign investors reaffirming their commitments to capital markets reforms. 

Despite public announcements by policy officials and market regulators, market sentiment remained negative amid ongoing weakness in the property market and the manufacturing sector. 

The Caixin Manufacturing PMI eased to 50.5 in December from 51.5 in November, confirming the slowdown reported by the official measure reported by the statistical bureau on December 31. 

The Caixin China General Services PMI rose to 52.2 in December from 51.5 in November, a seven-month high. 

The services sector activities accelerated amid rising domestic orders despite falling export orders. and upbeat sentiment. 

 

China Stock Movers 

The Hang Seng index decreased 0.4% to 19,683.12, and the mainland-focused CSI 300 index fell 0.2% to 3,767.0. 

Tech stocks advanced in the hopes of higher sales after policymakers vowed to expand the trade-in program. 

Lenovo Group increased 0.7% to HK $9.90, SMIC gained 0.7% to HK $29.75, and Contemporary Amperex Technology Co Ltd decreased 0.6% to ¥255.88. 

China Vanke Co. Ltd. decreased 1.4% to HK $5.02, China Resources Land fell 1.1% to HK $22.20, and Longfor Group Holdings fell 0.1% to HK $9.90. 

Alibaba Group declined 0.5% to HK $82.15, Baidu Inc. fell 0.6% to HK $80.60, JD.com added 1.1% to HK $135.60, and Meituan dropped 3.1% to HK $148.90.