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A trader works on the trading floor of the New York Stock Exchange (NYSE), Jan. 5, 2023.
Andrew Kelly | Reuters
Stocks rose, led by technology, as traders added to bets that inflation may be easing.
The Nasdaq Composite posted the biggest gain of 1.3%, driven by an 8% rally in Tesla shares, followed by the S&P 500 with a 0.5% gain. The Dow Jones Industrial Average lagged behind as defense pharma stocks like Merck and Johnson & Johnson weighed on the index, which rose 12 points, near a flat line.
“The market seems to be more optimistic, at least for 2023, than how we ended up in 2022,” said Chris Zaccarelli, chief investment officer at independent advisor Alliance. “Today is one of those days where you see growth outpacing value, and it’s returning to optimism about what’s going to happen to the stock market this year.”
That followed a short week of gains for the three major indexes, with the Dow and S&P 500 posting their best weeks since November. Some of those gains came Friday, with the Dow rallying 700 points, while the S&P 500 and Nasdaq gained 2.3% and 2.6%, respectively.
Friday’s gains were spurred by the latest set of economic data. Nonfarm payrolls rose slightly more than expected, but wages rose more slowly than expected. That, and data showing a slowdown in the services sector, boosted hopes that the central bank’s rate hikes are achieving their intended goal of slowing the economy.
That data helped investors shake off pessimism earlier in the week following the release of minutes from the Fed’s December meeting, in which officials said interest rates would have to be raised “for some time.”
Monday marks the fifth trading day of 2023, reminding investors of a well-known Wall Street rule that suggests the market will end the year if stocks perform well in the first five sessions. The S&P 500 has ended the year positive 83% of the time in its first five trading sessions — and is up 14% on average, according to Stock Trader’s Almanac.
Investors look at customer credit data coming in later in the day. Also expected is the December consumer price index report on Thursday and big bank earnings scheduled for Friday.
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