Stocks End Mixed After Yesterday’s Fall
5:03 pm Thursday, January 06th, 2022
The broader market was in a range, even as Treasury yields continue to edge higher.
Eight of the 11 S&P 500 sectors were trading higher, led by the energy (+2.0%), financials (+1.3%), and communication services (+1.4%) sectors with gains over 1.0%. The materials sector (-0.6%) is the only sector down more than 0.5%.
Market participants are still digesting the possibility for a more aggressive Fed, which is playing out in the five-basis-point increase in the 2-yr yield (0.88%). The 10-yr yield is up three basis points to 1.73% but has faced resistance at 1.75%.
The continued increase in interest rates hasn’t stopped dip-buying efforts, although it appears to have muddled those efforts.
Growth stocks, for example, took another spill shortly after the open, and while certain stocks like Meta Platforms (FB) and Alphabet (GOOG) have turned positive, others like Apple (AAPL) and Tesla (TSLA) are still struggling.
Overall, the current indication is still a lot better than earlier today, which saw the S&P 500 down 0.6% intraday and the Vanguard Mega Cap Growth ETF (MGK) down 1.2% intraday.
As gleaned from the gains in the energy and financial sectors, investors are still leaning on the value/cyclical stocks amid rebalancing efforts and a view that 2022 could be their year. The Russell 3000 Value Index is up 0.5%, versus a 0.2% gain in the Russell 3000 Growth Index.
Walgreens Boots Alliance (WBA) is an exception despite the Dow component beating top and bottom-line estimates and raising its FY22 EPS guidance. WBA shares were up 23% since Dec. 1, so there could be a sell-the-news factor in the price action.
Initial claims for the week ending January 1 increased by 7,000 to 207,000 (consensus 198,000) and continuing claims for the week ending December 25 increased by 36,000 to 1.754 million.
