The Markets (as of market close January 28, 2022)
A very turbulent week, marked by volatility, ended with a robust finish. Last Friday’s gains were enough to push several major benchmark indexes higher by the end of the week. The Dow advanced 1.3% and the S&P 500 gained 0.8%. A late-week tech rally was enough to move the Nasdaq back to where it began the week. Crude oil prices advanced for the sixth straight week, with prices reaching a nearly seven-year high.
Dip buyers and bargain hunters helped push the market indexes generally higher last Monday. After beginning the day well in the red, the Nasdaq was able to climb 0.6%, while the Dow and the S&P 500 each gained 0.3%. The Russell 2000 (-1.8%) and the Global Dow (-1.2%) failed to gain ground. Ten-year Treasury yields and crude oil prices declined, while the dollar gained a quarter of a percent.
Stocks were unable to maintain any momentum from the prior day, as each of the benchmark indexes fell last Tuesday. The Nasdaq led the downturn, dipping 2.3%, followed by the Russell 2000 (-1.4%), the S&P 500 (-1.2%), and the Dow (-0.2%). The Global Dow inched 0.2% higher. Investors apparently remained edgy as they awaited the Wednesday statement following the Federal Reserve’s meeting. Corporate earnings data for the fourth quarter of 2021 has not been quite as robust compared to the third quarter, although several major companies posted returns that beat projections
Last Wednesday, Wall Street reacted to the expected Federal Reserve announcement with mixed results. The Dow slid 0.4%, the Russell 2000 fell 1.3%, and the S&P 500 dipped 0.2%. The Nasdaq closed relatively unchanged. Among the market sectors, only financials and information technology gained ground, while materials and real estate each fell more than 1.0%. Ten-year Treasury yields added more than seven basis points to close at 1.85%. The dollar and crude oil prices also advanced on the day.
Despite last Thursday’s upbeat fourth-quarter gross domestic product, stocks couldn’t hold on to gains from earlier in the day, ultimately closing in the red. The Russell 2000 continued to dive lower, ending the day down 2.3%, followed by the Nasdaq (-1.4%), the Global Dow (-0.6%), and the S&P 500 (-0.5%). The Dow was flat by the end of Thursday’s trading. Ten-year Treasury yields dipped 4 basis points, crude oil prices slid minimally, while the dollar advanced 0.9%.
Stocks roared back last Friday with the best day since June 2020. Strong fourth-quarter earnings reports from some major corporations may have lured dip buyers, at least for the day. The Nasdaq jumped 3.1%, followed by the S&P 500 (2.4%), the Russell 2000 (1.9%), the Dow (1.7%), and the Global Dow (0.5%). Gains in the market sectors were widespread, with only energy losing ground.
Eye on the Week Ahead
The latest data on the employment sector is available this week with the release of the Job Openings and Labor Turnover Survey and the employment situation summary. Job openings have been falling, but the number of quits has continued to increase. On the employment side, December saw 199,000 new jobs added, the unemployment rate dipped, and average hourly earnings rose by 0.6%.
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The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 largest, publicly traded companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indexes listed are unmanaged and are not available for direct investment.