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Dow, S&P 500 sweep to record closes in 2022’s first session, while Nasdaq has biggest gain in a week

MarketWatch logo MarketWatch 1/3/2022 Vivien Lou Chen
© johannes eisele/Agence France-Presse/Getty Images

The Dow Jones Industrial Average and S&P 500 Index swept to record closes on Monday, driven by optimistic investors during the first day of trading in 2022, while joining the Nasdaq Composite in posting the biggest gains in a week. Among stocks on the move, shares of Tesla surged after record-breaking quarterly sales.

How did stock indexes trade?
  • The S&P 500 index finished up by 30.38 points, or 0.6%, at 4,796.56.
  • The Dow Jones Industrial Average closed higher by 246.76 points, or 0.7%, at 36,585.06.
  • The Nasdaq Composite Index finished higher by 187.83 points, or 1.2%, at 15,832.80.
  • It was the biggest one-day point and percentage gains for all three indexes since Dec. 27, and record closing levels for the Dow and S&P 500.

For last year, the S&P 500 soared 26.9%, beating both the Nasdaq’s 21.4% rise and the Dow’s 18.7% climb.

Read: The S&P 500 beat both Dow, and Nasdaq in 2021 by the widest margin in 24 years. Here’s what history says happens in 2022.

What drove the stock market?

Stocks finished higher after a bumpy start to the session amid a number of lingering concerns — including the surge in COVID-19 cases spurred by the rapid spread of the omicron coronavirus variant and the likelihood of multiple interest-rate hikes by the Federal Reserve, expected later this year.

Read: Odds of a March rate hike by the Federal Reserve are back above 50%

Financial markets were reflecting “broad optimism that the economy can weather omicron, as well as rate hikes from the Fed,” said Tom Garretson, senior portfolio strategist at  RBC Wealth Management, citing the resteepening of the Treasury yield curve to levels last seen around November.

“The economic outlook should be strong enough to support all those things,” he said via phone.

The Nasdaq Composite Index led the way Monday among stock benchmarks as “most investors take a more optimistic view on large-cap tech companies being potentially able to adapt to pandemic conditions,” said Timothy Chubb, chief investment officer at Girard, a wealth advisory firm in King of Prussia, Pennsylvania.

Even as Treasury rates rose across the board, the historically negative correlation between higher yields and the Nasdaq index “hasn’t necessarily held today,” Chubb said via phone.

Travel chaos greeted the start of the year, with more than 2,600 U.S. flights canceled on Sunday, amid winter storms and shortages of workers due to the fast-spreading omicron variant. Federal offices were also shut in Washington, D.C., as winter weather bore down on the mid-Atlantic.

The final reading of the IHS Markit purchasing managers index for manufacturing edged down to 57.7 from an initial reading of 57.8.

Separately, spending on construction projects rose 0.4% in November at a seasonally adjusted annual rate of $1.63 trillion, the Commerce Department reported Monday. Economists polled by The Wall Street Journal had expected a 0.7% increase. Spending in October was raised to a 0.4% gain from the prior estimate of a 0.2% rise.

Which companies were in focus?
  • Shares of Tesla Inc. closed 13.5% higher, after the electric-vehicle maker delivered more than 308,000 vehicles in the fourth quarter, blowing away analysts’ expectations. Deliveries surged about 87% in 2021.
  • Shares of Apple Inc. briefly crossed the threshold required for the company to achieve a $3 trillion market value Monday, but dropped and missed the mark. The shares fell short of the $182.86 closing level needed to reach the threshold. Apple shares rose 2.5% to close at $182.01.
  • U.S.-listed shares of BioNTech SE finished 10% lower and those for Pfizer Inc. closed down by 4.1% even after American health regulators cleared the use of a COVID-19 booster from those companies in teens as young as 12 years old.
  • U.S.-listed shares of Nio Inc.  finished 5.7% higher after the China-based electric vehicle maker announced record fourth-quarter deliveries. 
How did other assets trade?
  • The yield on the 10-year Treasury note  rose 13.2 basis points to 1.628%, the largest one-day gain since Nov. 9, 2020, based on 3 p.m. levels, according to Dow Jones Market Data. Yields and debt prices move opposite each other.
  • The ICE U.S. Dollar Index  a measure of the currency against a basket of six major rivals, rose 0.3%.
  • Oil futures rebounded, with West Texas Intermediate crude for February delivery  climbing 87 cents, or 1.2%, to settle at $76.08 per barrel.
  • Gold futures  for February delivery  settled at $1,800.10 per ounce, down $28.50 or 1.6%, after 2021 marked the sharpest annual fall since 2015.
  • Bitcoin   was down 2.5%.
  • The Stoxx Europe 600  finished 0.4% higher, hitting a fresh record close. Markets in London were closed for the holiday.
  • Several Asian markets were closed for holidays. The Hang Seng Index  finished 0.5% lower, while the Korea KOSPI closed up by 0.4%.

Mark DeCambre and Mike Murphy contributed to this article

Video: Market Open: December 23, 2021 (CNBC)


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