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Wall Street downplays worries in wishful start to 2022

EconomyJan 04, 2022 01:10AM ET
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© Reuters. FILE PHOTO: A U.S. one dollar banknote is seen in front of displayed stock graph in this illustration taken May 7, 2021. REUTERS/Dado Ruvic

By Lawrence Delevingne

BOSTON (Reuters) - Wall Street's New Year optimism overpowered concerns about the coronavirus and inflation on Monday, with U.S. and European equity markets advancing in parallel with rising oil prices and U.S. Treasury yields.

The Dow Jones Industrial Average rose 246.76 points, or 0.68%, to 36,585.06; the S&P 500 gained 30.38 points, or 0.64%, to 4,796.56; and the Nasdaq Composite added 187.83 points, or 1.2%, to 15,832.80.

Leading the way were Apple Inc (NASDAQ:AAPL), which on Monday became the first company with a $3 trillion stock market value, and Tesla (NASDAQ:TSLA) Inc, whose shares were up more than 13.5% after reporting stronger-than-expected quarterly deliveries of its electric cars.

The S&P index surged nearly 28% last year, driving MSCI's 50-country index of world stocks to its third consecutive year of double-digit gains.

European shares ended at all-time highs on Monday on hopes of steady economic recovery despite a surge in COVID-19 cases. The pan-European STOXX 600 index ended 0.5% higher at a record close of 489.99 points.

The benchmark U.S. 10-year yields hit a six-week high to yield 1.6384%, with investors expecting a series of interest rate raises this year to combat rising inflation.

"How central banks - particularly the Fed - respond to inflation will be the key story for 2022," BlackRock (NYSE:BLK) Investment Institute strategists wrote in a note Monday.

"We see the higher inflation regime and solid growth as positive for risk assets but bad for bonds for a second consecutive year," they added.

The commodity markets were also quickly back in the swing of things after their nearly two-year resurgence to close out 2021.

Oil rose to nearly $79 a barrel on Monday, supported by tight supply and hopes of a further demand recovery in 2022, despite OPEC+ looking set to agree to a further increase in output.

"Oil markets start the new year on firmer footing than they did in 2021," Peter McNally, global sector lead at investment research firm Third Bridge, wrote in an email. "Inventory levels have fallen dramatically over the past 12 months as demand recovered, OPEC+ constrained output, and US oil supply was slow to respond."

The U.S. dollar rose against a basket of major currencies on Monday, the first trading day of the new year, in sync with government bond yields as investors expect the Federal Reserve will stay on its path of interest rate hikes in 2022.

Gold prices fell more than 1% on Monday as a risk-on rally in equities pressured bullion. Spot gold dipped 1.5% to around $1,801 an ounce, set for its biggest one-day percentage decline in more than a month. U.S. gold futures fell 1.57% to $1,799.40 an ounce.

Wall Street downplays worries in wishful start to 2022
 

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Comments (11)
Adam Paine
Adam Paine Jan 04, 2022 1:07AM ET
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why is there no cap on margin use?? we are at almost a Trillion margin debt. that means collectively, 500bn needed to borrow 1 TRILLION. brokers are getting rich borrowing $$$ at rock bottom interest. then loan margin for high interest...hmmm somethings not right here. thanks to the FED for creating the biggest wealth gap we've seen in a long time. QE killed the free market thanks to Bernake '08.
Porimol Minzi
Porimol Minzi Jan 03, 2022 11:32PM ET
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Porimol Minzi
Wilks Campbell
Wilks Campbell Jan 03, 2022 10:33PM ET
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if you make the pig too tense in the beginning, they will secret bad hormone, not good for the slaugter house business if those 15% of world population that control 80% world' resources agree !
Wilks Campbell
Wilks Campbell Jan 03, 2022 10:25PM ET
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let the retail investors get high first. It is their pig farm if you will. ...
Wilks Campbell
Wilks Campbell Jan 03, 2022 10:22PM ET
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Author is first day in Wall Street! Should know well the Walk Street Crocodile's practice , narratives and play plot!
zen cool
zen cool Jan 03, 2022 9:45PM ET
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excluding trash HSI!
Al Ose
Al Ose Jan 03, 2022 6:56PM ET
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Nssdaq will take a 5% clip over next two weeks. Seems strange right? :)
Hunt Richardson
Hunt Richardson Jan 03, 2022 4:45PM ET
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Tomorrow's Reuters headline: "Fear rattles Wall Street, bears bite as reality sinks in". Following day: Wall Street recovers from sell off, surges to new highs as bulls shake off worry". Rinse and repeat...
Hugo Alberto Lopez Legarda
Hugo Alberto Lopez Legarda Jan 03, 2022 12:59PM ET
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this is scary
Iyarin Boonnum
Iyarin Boonnum Jan 03, 2022 11:12AM ET
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Even Elon Musk and Ray Dalio, and many Economists said US stock market will collapse soon
 
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