A trader works on the trading floor on the Recent York Stock Exchange (NYSE), January 5, 2023.
Andrew Kelly | Reuters
Stocks rallied for a second straight session Monday, as traders tried to claw back a number of the ground lost in 2022.
The Nasdaq Composite had the largest advance of 1.5%, pushed up by an 8% rally in Tesla stock. The Dow Jones Industrial Average gained 39 points, or 0.1%. The S&P 500 gained 1.6%.
That follows a winning shortened week for the three major indexes, with the Dow and S&P 500 posting their best weeks since November. A bit of those gains got here Friday, with the Dow rallying 700 points, while the S&P 500 and Nasdaq advanced 2.3% and a pair of.6%, respectively.
Friday’s gains were spurred by the most recent batch of economic data. Nonfarm payrolls got here in barely higher than expectations, but wages increased at a slower pace than expected. That, and data showing a contraction within the services sector, heightened hopes that the central bank’s rate hikes are accomplishing the intended goal of cooling the economy.
That data helped investors shake off pessimism earlier within the week following the discharge of the December Fed meeting minutes, during which officials said rates of interest would have to be elevated for “a while.”
“Even the Fed is beginning to signal to markets that the work is sort of complete,” said Jamie Cox, managing partner of Harris Financial Group. “That is also contributing to positives in markets.”
Monday marks the fifth trading day of 2023, reminding investors of a classic Wall Street rule that means the market will end the 12 months up if stocks perform well in the primary five sessions. The S&P 500 has ended the 12 months positive 83% of the times it ended the primary five trading sessions up — and with a median gain of 14%, based on the Stock Trader’s Almanac.
Investors will look ahead to consumer credit data coming later within the day. Also they are anticipating December’s consumer price index report coming Thursday and large bank earnings scheduled for Friday.