[ad_1]
Stocks took an early loss and rose in midday trading on Wall Street on Tuesday as tech stocks reversed course and rose.
The S&P 500 was up 0.4% as of 12:01 a.m. Eastern time. The benchmark index is coming out of five consecutive losses and there hasn’t been a winning day since the first trading day of the year.
The Dow Jones Industrial Average rose 5 points, or less than 0.1%, to 36,074 and the tech-heavy Nasdaq gained 1.2%.
Traders are trying to adjust how markets and the economy will cope with the higher interest rates likely to come from the Federal Reserve this year. This has weighed heavily on expensive tech stocks, which have become less attractive to investors as interest rates rise.
Tech shares have been volatile since Monday, when the afternoon rally for the industry cut most of the broader market losses. Apple was up 1.5% and chipmaker Nvidia was up 1.8%.
Retailers and other companies that rely on direct consumer spending also gained ground.
US crude oil prices rose 3.5%, helping to boost energy stocks. Exxon Mobil was up 2.6%.
Bond yields have been mostly stable, although they have increased sharply since the start of the year. The 10-year Treasury rate fell to 1.76% from 1.77% on Monday.
Utilities and other investments considered less risky fell.
The Fed said it would accelerate the reduction of bond purchases, which helps keep interest rates low. The market is now putting the chance of the Fed increasing short-term interest rates by at least a quarter point in March at around 78%. A month ago, it was about 36%.
As businesses and consumers face ever-increasing inflation, the central bank is easing its support for the US economy and financial markets.
Fed Chairman Jerome Powell acknowledged Tuesday that high inflation is posing a serious threat to the Fed’s goal of helping return more Americans to work, and that the Fed will raise rates more than it now plans if necessary to stem rising prices. Powell spoke at a session of the Senate Banking Committee, which is considering his candidacy for a second four-year term.
The World Bank lowered its forecast for the global economy, partly blaming supply chain problems that fueled inflation. The 189-nation anti-poverty agency forecasts 4.1% worldwide economic growth this year, up from the 4.3% it predicted last June. It also fell from the 5.5% expansion that it predicted the global economy had picked up in 2021.
Investors will receive two important reports on inflation from the Department of Labor this week. The December Consumer Price Index will be released on Wednesday and will provide an update on how inflation is driving commodity prices for consumers. The December Producer Price Index will be released on Thursday and will provide another update on how inflation affects prices for businesses.
Wall Street is also tracking the growing number of coronavirus cases globally to gauge the economic impact. China, the world’s second largest economy, has quarantined a third city due to the recent surge.
Major companies, including automakers like Toyota, have been counting on a pickup in supplies of semiconductor chips and other products from China and the rest of Asia as vaccines and other coronavirus prevention efforts progress. The recent surge in infections caused by the omycrone variant of the coronavirus has shaken such hopes.
[ad_2]
Source link