Tech Fuels Rebound as Nasdaq 100, S&P 500 Gain 1%: Markets Wrap
(Bloomberg) — Investors have finally been induced to buy the dip after a volatile week, suggesting Wall Street stocks may finally halt a five-day losing streak that’s the longest since April.
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Tech once again led the market higher with the Nasdaq 100 climbing as much as 1.4%, while the S&P 500 rose 1%. Among individual stock movers, Freddie Mac and Fannie Mae traded near eight-year highs on plans to release the mortgage giants from government supervision. United States Steel Corp. fell 6.8% after President Joe Biden blocked Nippon Steel Corp.’s proposed purchase of the company.
The S&P 500 index notched intraday gains in the previous two sessions, only to close lower as investors weighed readouts suggesting the world’s largest economy was still going strong against the prospect of slower interest-rate cuts from the Federal Reserve.
On Friday, data showed US manufacturing rose at a modest pace in December. The Institute for Supply Management’s gauge hit 49.3, topping estimates, but remained below 50, a level that indicates economic expansion. New orders rose to the highest since the start of last year. Treasuries dipped after the report while stocks held onto gains.
Vital Knowledge’s Adam Crisafulli said the ISM readout was incrementally positive but “but it will reinforce worries about hawkish policy and elevated yields.”
A key afternoon vote on the House speaker could spark further swings. Mike Johnson’s reelection to the post will signal how united the GOP is behind the president-elect’s planned policies when he takes office in the weeks ahead.
“We really need to see more of that clarity on Jan. 20 for markets to have greater conviction,” Laura Cooper, global investment strategist at Nuveen, said on Bloomberg Television. “US exceptionalism will continue to be the dominant theme at least in the first half of the year, regardless of what some of those policies that come through are.”
The dollar drifted after setting a two-year high Thursday, while Treasury yields climbed following ISM data. The rate on the benchmark 10-year is more than 15 basis points above the level prior to Jerome Powell’s hawkish turn at the Dec. 18 Federal Reserve meeting.
Biden’s decision to block the $14.1 billion sale of US Steel to Nippon Steel killed a high-profile deal that sparked a political firestorm and tensions between the US and Japan. Biden announced his formal decision on Friday after the case was referred to him by a US security review panel, ahead of a deadline early next week.
