Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Wall St ends firmer, growth stocks lead in thin trading

Published 12/29/2022, 07:19 AM
Updated 12/29/2022, 06:49 PM
© Reuters. FILE PHOTO: A trader works on the trading floor at the New York Stock Exchange (NYSE) in New York City, U.S., December 14, 2022. REUTERS/Andrew Kelly

© Reuters. FILE PHOTO: A trader works on the trading floor at the New York Stock Exchange (NYSE) in New York City, U.S., December 14, 2022. REUTERS/Andrew Kelly

By Echo Wang

(Reuters) - Wall Street's main indexes closed higher on Thursday, led by growth stocks in light trading, as U.S. unemployment data signaled the Federal Reserve's interest rate hikes might be starting to dent labor market strength in its bid to fight inflation.

All 11 S&P 500 sector indexes rose, with communication service and technology as the biggest winner with gains of nearly 3%.

"It's just relief," said Keith Buchanan, portfolio manager at GLOBALT Investments in Atlanta. "Selling pressure has been overwhelming the market recently and we could be having a break. That allowed room for stocks to move, and with lower volume (that) can materialize into a pretty good day."

Apple Inc (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL) Inc, Microsoft Corp (NASDAQ:MSFT) and Amazon.com Inc (NASDAQ:AMZN), whose shares have been battered in the past few sessions, each gained more than 2.5%.

The U.S. Labor Department reported an increase in the number of Americans filing new claims for unemployment benefits last week. But the data indicates a tight U.S. job market even as the Fed works to cool demand for labor in its bid to lower inflation.

The yield on 10-year Treasury notes fell 2.2 basis points to 3.864% on the news.

The Fed's aggressive interest rate hikes have hammered equities this year, with the benchmark S&P 500 shedding 19.3% and the tech-heavy Nasdaq tumbling nearly 33%.

The technology, consumer discretionary and communication services sectors - which house several rate-sensitive high growth shares - are down between 29% and 40% this year, making them the worst performers among S&P 500 sector indexes.

Energy shares have bucked the trend with stellar annual gains of 57%.

Wall Street's main indexes dropped more than 1% on Wednesday, with the Nasdaq Composite Index hitting a 2022 closing low as rising COVID cases in China and geopolitical tensions added to fears of a likely recession in 2023.

However, investor preference for high-dividend yielding stocks with steady earnings has limited losses in the Dow Jones Industrial Average, which is down just 8.5% for the year.

The Dow rose 345.09 points, or 1.05%, to 33,220.8; the S&P 500 gained 66.06 points, or 1.75%, at 3,849.28; and the Nasdaq Composite added 264.80 points, or 2.59%, at 10,478.09.

Tesla (NASDAQ:TSLA) Inc shares rose after Chief Executive Elon Musk told staff they should not be "bothered by stock market craziness."

For 2022, Tesla's 66% slump and Amazon.com's 50% drop played a big part in the S&P 500 consumer discretionary sector's 38% loss. Some $1.6 trillion worth of shareholder value evaporated after investors abandoned high-growth stocks with pricey earnings multiples.

Volume on U.S. exchanges was 8.78 billion shares, compared with the 10.95 billion average for the full session over the last 20 trading days.

© Reuters. FILE PHOTO: A trader works on the trading floor at the New York Stock Exchange (NYSE) in New York City, U.S., December 14, 2022. REUTERS/Andrew Kelly

Advancing issues outnumbered decliners on the NYSE by a 4.80-to-1 ratio; on Nasdaq, a 4.30-to-1 ratio favored advancers.

The S&P 500 posted one new 52-week high and no new lows; the Nasdaq Composite recorded 75 new highs and 160 new lows.

Latest comments

what a load of bulloney
I will better spend my sweat money on pleasure than to invest it into stock markets
And when you are old, you can buy food with your memories.
  Shamo is a future welfare recipient  ;-)  Ironically, most perma-bears are retrumplicans who oppose welfare.
Oh yes. That weekly jobless number will turn a greatly overvalued stock market around.
So many white collar folks on severance pay until end of year. Wait until January for rise.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.