Stocks Gain Momentum After Recent Correction
2:55 pm Thursday, December 08th, 2022
Today’s trade had a positive bias after a rough start to the month for equities. Over the last nine sessions, there has been only one positive close for the S&P 500. Moreover, the S&P 500 has had the worst start to a month (five consecutive losses) since 2011, according to Bloomberg.
Right out of the gate, the S&P 500 moved higher but then faded back to test yesterday’s closing level (3,933.92). Buyers, though, showed up and the market found support there, which has aided sentiment.
Broad based buying has the major indices oscillating around a narrow range comfortably above the unchanged mark. Advancers lead decliners by a roughly 2-to-1 margin at the NYSE and a greater than 3-to-2 margin at the Nasdaq.
Most of the 11 S&P 500 sectors trade in positive territory led by information technology (+1.3%) and real estate (+0.9%). Meanwhile, the communication services sector (-0.2%) is the top laggard due to weakness in Alphabet (GOOG).
Corporate news drivers with market-moving cachet have been lacking, which is why today’s trade seems to be driven more by technical and sentiment factors.
Tesla (TSLA), however, is an individual story stock of note. It is losing ground again on news that Elon Musk’s bankers could provide him with new margin loans supported by Tesla stock to replace high interest Twitter debt, according to Bloomberg. The company is also aiming to shorten shifts in Shanghai and delay hiring, according to CNBC.
Weakness in Tesla has limited gains for the consumer discretionary sector (+0.4%), but a strong showing from casino stocks is keeping the sector in positive territory. Las Vegas Sands (LVS) and Wynn Resorts (WYNN) are among the biggest winners for the group following reports that Macau is easing COVID-19 testing requirements, according to Reuters.
Treasury yields are headed higher today. The 2-yr note yield is up eight basis points to 4.32% and the 10-yr note yield is up seven basis points to 3.48%.
