Nasdaq ends higher, Boeing curbs gains in Dow

NEW YORK: The Nasdaq scored its first gain of at least 1% in 2024 on Monday (Jan 8), as a fall in Treasury yields helped lift megacap stocks, while a sharp drop in Boeing shares kept gains on the Dow Industrials in check.

The Dow Jones Industrial Average rose 216.90 points, or 0.58%, to 37,683.01, the S&P 500 gained 66.30 points, or 1.41 %, to 4,763.54 and the Nasdaq Composite gained 319.70 points, or 2.20%, to 14,843.77.

The gains in the Nasdaq and the S&P 500 marked their first daily percentage climbs of more than 1% since Dec 21 and biggest one-day percentage advances since Nov 14.

Megacaps advanced, lifting stocks such as Amazon.com which closed up 2.66% and Alphabet, which rose 2.29%, as Treasury yields fell ahead of readings on inflation and a new supply of government debt this week, with the benchmark 10-year US Treasury yield hitting a low of 3.966% on the session.

In addition, Apple climbed 2.42% after the iPhone maker said its Vision Pro mixed-reality device will be available for sale from Feb 2 in the United States.

Nvidia surged 6.3% and fellow chipmaker Advanced Micro Devices jumped 5.48%, helping to push the Philadelphia SE Semiconductor Index up 3.28% as it bounced from a 5.8% drop last week, its biggest weekly percentage fall since October 2022.

“This is definitely a yield-driven market for now and investors are trying to discount when and how many rate cuts we will see, the timing and the magnitude of rate cuts,“ said Bill Merz, head of capital markets research at US Bank Wealth Management in Minneapolis.

“Now we’re probably in a more rational place in terms of yields and it’s a question of, is the market getting that right and are yields falling for the right reasons or the wrong reasons? And investors have so far taken the view that yields are falling for all the right reasons, that the Fed is navigating what thus far has been a soft landing.”

Meanwhile, Boeing shares plunged 8.03% after the plane maker and US regulators gave the go-ahead on Monday for airlines to inspect jets that were grounded after a panel blew off an Alaska Airlines-operated 737 MAX 9 in mid-flight which forced a dramatic landing of the airliner over the weekend.

The S&P 500 energy index was the sole decliner among the 11 S&P 500 sectors, falling 1.16% after hitting its lowest level in a month as crude prices sank about 4% after sharp price cuts by top exporter Saudi Arabia and a rise in Opec output.

On Friday, the benchmark S&P 500 snapped a nine-week streak of gains, as investors dialed back expectations on the possible aggressiveness of the Federal Reserve in cutting interest rates this year following a mixed bag of economic data on the labor market and services sector.

Atlanta Fed president Raphael Bostic said on Monday that the central bank’s dual goals of lowering inflation and maintaining low unemployment are not yet in conflict.

Money markets now see a 63.8% chance of at least a 25-basis point rate cut as soon as March, according to CME’s FedWatch Tool, down from 88.5% a week ago.

Investors will eye inflation data this week in the form of the consumer price index and the producer price index to shape expectations for the path of interest rates by the Fed. – Reuters