Stock market today: Dow shrugs off rising yields to close higher
By Yasin Ebrahim
Investing.com -- The Doe closed higher Tuesday, shrugging off a rebound in Treasury yields as investors continue to bet on less hawkish Federal Reserve tightening with just days to go until the December inflation report.
The Dow Jones Industrial Average gained 0.56%, or 186 points, the Nasdaq Composite was up 1%, and the S&P 500 rose 0.69%.
Communications services led the broader market higher, underpinned by a rally in Netflix Inc (NASDAQ: NFLX ), Meta Platforms (NASDAQ: META ), and Warner Bros Discovery (NASDAQ: WBD ).
Warner Bros. Discovery rallied more than 8% after Bank of America added the stock to its best ideas list. “We anticipate ’23 will be the beginning of our growth and deleveraging thesis for WBD,” BofA said.
Defensive corners of the market including consumer staples and utilities, which tend to serve as a bond proxy, fell as 10-year treasury yields rallied nearly 3%, clawing back losses from a day earlier.
Big tech, meanwhile, traded mostly higher, with Apple Inc (NASDAQ: AAPL ) and Microsoft Corporation (NASDAQ: MSFT ) in the green, with the latter supported by a positive note from Wedbush.
“While Azure growth has clearly decelerated in the field we believe MSFT should be able to exceed its 37% Azure growth target (constant currency) in the December quarter when Redmond reports earnings in late January,” Wedbush said in a note, citing recent conversations with Microsoft customers and partners.
Treasury yields rebounded from a day earlier as investors weigh up hawkish commentary from Federal Reserve officials including chairman Jerome Powell this week.
Federal Reserve Chairman Jerome Powell didn’t provide any fresh clues on monetary policy, but indicated the central’s bank resolve, saying that unpopular decisions may be needed to bring inflation down.
"[R]estoring price stability when inflation is high can require measures that are not popular in the short term as we raise interest rates to slow the economy,” the chairman said in prepared remarks.
The remarks echoed those from other Fed members including San Francisco Fed President Mary Daly and Atlanta Fed President Raphael Bostic who insisted the Fed will have to keep rates higher for longer.
The inflation report due Thursday is expected to show a slowdown in price pressures .
“We expect a 0.06% decline in headline CPI (vs. flat consensus), which would lower the year-over-year rate to 6.43% (vs. 6.5% consensus and down from a peak of 9%), as lower gasoline prices offset higher food prices,” Goldman Sachs said in a note.
On the earnings front, Bed Bath & Beyond Inc (NASDAQ: BBBY ) reported a wider than expected fiscal third-quarter loss , but its shares rallied 27%. The home goods retailer is also believed to have begun its latest round of jobs cuts as it fights for its financial life, CNBC reported.
Coinbase Global (NASDAQ: COIN ) closed 13% higher after detailing plans to slash its workforce by 20% as the cryptocurrency exchange ramps cost cuts amid a weaker crypto backdrop.
In other news, Amazon.com Inc (NASDAQ: AMZN ) said it was expanding its prime buy service, which allows merchants to offer prime benefits including free shipping and returns on their own site. Its shares were up nearly 3%.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.
Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb
Drop an image here or