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S&P 500 Claws Back Losses as Tech Moves Off Lows

Stock MarketsJan 24, 2022 03:53PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 cut the bulk of losses Monday, as investors bought the dip in stocks even as Federal Reserve is expected to signal a faster pace of monetary policy tightening later this week. 

The S&P 500 fell 0.2%, after falling into correction terriroty intraday. The Dow Jones Industrial Average slipped 0.18%, or 60 points, the Nasdaq gained 0.1%.

Battered growth sectors of the market like tech, communication services, and consumer discretionary found support after a plunge intraday as investors bought the dip in megacap tech. 

Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), and  Meta Platforms (NASDAQ:FB) ended the day well off their session lows.   

The turnaround in the broader market comes just two days to go until the Federal Reserve delivers its update on monetary policy, with many fear the U.S. central bank will lean hawkish and confirm current expectations on Wall Street for a faster pace of rate hikes.

“The January FOMC meeting should continue the Fed's hawkish policy pivot by signaling that it will soon be appropriate to begin removing accommodation,” Deutsche Bank. On the policy rate, the meeting statement and Chair Powell's press conference should confirm that liftoff is likely in March.”

U.S. bond yields, which trade inversely to prices, were in the red, but have racked up gains of late in the weeks lead up to the Fed meeting.

Netflix (NASDAQ:NFLX), which fell the most since 2012 last week following disappointing guidance, cut losses to trade down 3%/

Snap (NYSE:SNAP), meanwhile, pared some losses despite Wedbush downgrading its rating on social media stock to neutral from outperform, citing concerns over rising competition and the impact of Apple’s privacy changes.

“[W]e see risk to Snap’s revenue growth targets stemming from IDFA headwinds, difficult comps from stellar growth in 2020-21, and increasing competition from TikTok in particular,” Wedbush said in a note.

Cyclical stocks including energy and financials, which made a strong start to the year, also found support. 

Energy ended the day roughly flat after falling 3% as oil prices pared losses at at time when analysts’ continue to price in the risk of potential supply disruptions amid rising geopolitical tensions.

“The further escalation of the Ukraine conflict and the fraught security situation in the Middle East justify a risk premium on the oil price because the countries involved – Russia and the U.A.E. – are important members of OPEC+,” Commerzbank said in a note.

Kohls (NYSE:KSS), however, sidestepped the broader market selloff, rallying more than 30% on reports that the company has attracting offers from two suitors.

Peloton Interactive (NASDAQ:PTON) also gained on investor bets of the potential deal activity after activist investor Blackwells Capital urged the exercise equipment company to fire chief executive John Foley.

S&P 500 Claws Back Losses as Tech Moves Off Lows
 

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Comments (21)
Ac Tektrader
Ac Tektrader Jan 24, 2022 5:04PM ET
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the selling stopped at a predicted fib number. and the shorts covered....and the amateurs got screwed.
Al Ose
Al Ose Jan 24, 2022 4:51PM ET
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Ive seen these bounces before. Itll be short lived. Little reason to buy right now. No reason to rush in unless for a trade
Ac Tektrader
Ac Tektrader Jan 24, 2022 4:49PM ET
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Max max ...most of the big investors that can move markets are Republicans, and they want a much bigger correction than 10%, they are the ones with the big money short positions.
Mohammed Nur
Mohammed Nur Jan 24, 2022 4:27PM ET
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To buy
Ac Tektrader
Ac Tektrader Jan 24, 2022 4:21PM ET
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the market always gives you a chance to clear your positions.... the break with volume suggests a major change in direction. a powerful bounce to the 4511 area is possible. how it gets there will determine how high we go, there targets as high as 4572 before the s&p500 takes another leg down to a lower low.
Gus McCrae
Gus McCrae Jan 24, 2022 4:15PM ET
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10/12% "corrections" are the max Dems will allow it to go before mid terms. Even if it means kicking the can even further
Buy And Sell
Buy And Sell Jan 24, 2022 4:08PM ET
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Bull market is coming with force and then run out of money...down again...bears are riding into wall street and tip this giant market into a deep hole sorry young americans!
jake goldstein
jake goldstein Jan 24, 2022 4:06PM ET
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Fraud.Fake,
Ac Tektrader
Ac Tektrader Jan 24, 2022 4:06PM ET
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jake must have lost a lot of money
jake goldstein
jake goldstein Jan 24, 2022 4:01PM ET
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fraud.super dead cat bounce.Still heading down but much faster soon
Ronald Warren
Ronald Warren Jan 24, 2022 4:01PM ET
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EXACTLY! Be Ready!
Gus McCrae
Gus McCrae Jan 24, 2022 4:01PM ET
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this is not a dead cat, this is a reversal from the bottom. tomorrow could be the dead cat if we get another green candle
Matt Kay
Matt Kay Jan 24, 2022 4:00PM ET
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6% Russell move on the day. Biggest ever up-move except for when Biden won and covid vaccine got developed. So yeah... this market is totally not a scam at all....
 
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