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S&P 500 Closes Flat as Tech Turnaround Sparks Rebound

Stock MarketsJan 10, 2022 04:07PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 cut losses to end flat Monday as tech staged a turnaround, shrugging off growing expectations for a faster pace of monetary policy tightening from the Federal Reserve.

The S&P 500 fell 0.1% and the Dow Jones Industrial Average slipped 0.5%, or 163 points. The Nasdaq closed 0.05% higher, erasing a 2.7% intraday loss.

Tech clawed back intraday losses after starting the day on the back foot following expectations for a more aggressive pace of rate hikes, the enemy of growth stocks. Goldman Sachs lifted its Fed rate hike forecast to four hikes this year compared with prior estimates of three hikes.

Pointing to “declining labor market slack and “upside inflation risks,” Goldman’s Chief Economist Jan Hatzius said the bank continues "to see hikes in March, June, and September, and have now added a hike in December for a total of four in 2022.” 

The rate-hike outlook comes just a day ahead of Fed Chairman Jerome Powell's confirmation hearing on Tuesday, when the Fed chief may offer fresh clues on monetary policy.   

Big tech closed well above its lows, with Meta Platforms (NASDAQ:FB), formerly know as Facebook and Amazon (NASDAQ:AMZN) closing lower. Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT), and Alphabet (NASDAQ:GOOGL) ended the day higher. 

Semiconductor stocks also rebounded off lows to help the broader tech sector recover.

The more cyclical, or value areas of the market including energy and financials, which tend to perform well in an increasing interest rate environment continued to be favored.

“[T]he cheapest stocks tend to outperform the most expensive stocks when interest rates are rising. Today, energy and financials remain well represented on the list of the cheapest names, while technology remains well represented on the list of the most expensive names,” {{RBC said in a note}}.

“[W]e think the outperformance trade in value/cyclical isn’t done yet,” it added.

Financials were up about 0.9%, with major Wall Street banks trading just below the flatline ahead of the quarterly earnings season, which gets underway on Friday.

JPMorgan (NYSE:JPM), Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) report earnings on Friday.

Lululemon Athletica (NASDAQ:LULU), meanwhile, warned that fourth-quarter results would suffer hit from the impact of the omicron Covid-19 variant. Lululemon now expected fourth-quarter adjusted earnings per share also toward the low end of its range of $3.25 to $3.32, with revenue also expected within the lower of guidance range of $2.13 billion to $2.17 billion.

In deal making news, Zynga (NASDAQ:ZNGA) agreed to be acquired by video game maker Take-Two (NASDAQ:TTWO) Interactive in a deal worth $12.7 billion, sending its shares more than 40%. Take-Two fell 13%.

“We’ve been anticipating a strong start to the year for value/cyclical, followed by a pivot back to growth/secular later in the year,” RBC said. “So far that’s playing out, and we think the outperformance trade in Value/Cyclical isn’t done yet.”

S&P 500 Closes Flat as Tech Turnaround Sparks Rebound
 

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Comments (12)
Mitchel Pioneer
Mitchel Pioneer Jan 10, 2022 9:08PM ET
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Another magic show by the greatest financial fraud in history, and biggest investment JOKE in the world.
Dave Jones
Dave Jones Jan 10, 2022 8:12PM ET
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A rebound sparks a rebound!! Never seen that one before! That's like saying stocks going up due to stocks going up.
Stan Smith
Stan Smith Jan 10, 2022 6:58PM ET
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Even more miracles after Christmas. Must be that incredible consumer economy. LOL. Thanks FED
Jeremy Gautier
Jeremy Gautier Jan 10, 2022 6:51PM ET
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look on the pic the guy at the right ^^
Dave Jones
Dave Jones Jan 10, 2022 6:51PM ET
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they are actors
Critical Riff
Critical Riff Jan 10, 2022 6:50PM ET
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I'll make another point. True bears have gone through the whole pandemic thinking of the value of money and assets. Bulls cry at -4% and then feel like they've won the world when it rises 0.5%. Nasdaq rises almost 150% due to the fed, and there's fear at -9% max, but really that was only once, and its really more like -3% to -4%. Either you've been watching too much tiktok or you're being dishonest
New Jazenevd
New Jazenevd Jan 10, 2022 6:32PM ET
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Present market dip will not continue forever. It will end very soon. Next dip will happen at higher level. Sitting on sidelines with cash, when inflation is very high, is truly ridiculous.
Chad RicherThanYou
Chad RicherThanYou Jan 10, 2022 6:05PM ET
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BEARS IN ABSOLUTE SHAMBLES 🤣🤣🤣
Critical Riff
Critical Riff Jan 10, 2022 5:53PM ET
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lol bulls laugh at this because they love the devaluing of everything as inflation rises, the money just appears from no where as the mountain of debt that keeps everything alive rises until it collapses
Chad RicherThanYou
Chad RicherThanYou Jan 10, 2022 5:23PM ET
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I bought calls on the dip and made $15,000 in profit!!! 300% gain
Gary Parnes
Gary Parnes Jan 10, 2022 5:23PM ET
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Have 55 calls ,was down 6000.00 ended up 4000.00 dollars. Hopefully tomorrow will be a turnaround Tuesday so can be up another 10,000.00 dollars
Petet Larkar
Petet Larkar Jan 10, 2022 4:55PM ET
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shorties got scammed lol
Mario tragik
Mario tragik Jan 10, 2022 4:44PM ET
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omg what a scam, this is criminal 2% down for the day erased in a couple of hours. what a criminal joke this is.
Jacob Lahr
Jacob Lahr Jan 10, 2022 4:44PM ET
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Get rekt
Dave Jones
Dave Jones Jan 10, 2022 4:26PM ET
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hide your faces
 
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