Stocks Snap Losing Streak

By Connor Smith |  Friday, January 28 Just What the Doctor Ordered. U.S. stocks roared back on Friday as earnings reports from the likes of Apple and Visa delivered big amid ongoing uncertainty for markets. The Nasdaq Composite surged 3.1% to eke out a slight gain for this week and snap a four-week losing streak. The tech-heavy index is still down 12% in 2022. The S&P 500 index rose 2.4%—the index's largest one-day percentage gain since June 5, 2020. The Dow Jones Industrial Average rose 1.7%. Visa led the Dow, contributing 144 points to its 565 point jump. Apple was next, adding 83 points. The latest inflation gauge, the personal consumption expenditure index, came in slightly higher than expectations, with the core reading, which excludes more volatile food and energy prices, up 4.9% year over year, versus a 4.8% estimate. That's a sign inflation remains very much in place. But a separate measure -- the employment cost index -- came in cooler, showing that employer compensation costs rose 1% in the fourth quarter, below economists' 1.3% forecast. An optimist could use that data to see a peak in inflation. And investors might have chosen to take that optimistic view today, with stocks gradually rising as the day went on.  Eric Savitz writes that though tech stocks showed some fight on Friday, the sector remains battered. The Nasdaq Composite is down 16% over the past two months—and beneath the surface, the damage is considerably worse. Among Nasdaq stocks with market caps over $1 billion, one-quarter are down 30% or more since mid-November. More than 60 Nasdaq stocks are down 50%-plus, including familiar names like Overstock, Affirm, Robinhood, DocuSign, and Etsy. While stock prices are a lot lower, they are hardly de-risked. As the Federal Reserve made clear last week, rate increases are coming, likely by March. Higher rates are bad for the kind of high-multiple growth stocks that led the market over the past two years. With a possible bomb cyclone on the way in the Northeast, Wall Street could use some Silicon Valley sunshine right about now. Watch our weekly TV show on Fox Business Saturdays at 10 a.m. or 11:30 a.m. ET; or Sundays at 10 a.m. or 11:30 a.m. ET. This week, Daniel Yergin of IHS Markit on the prospect of $100 a barrel oil, and more with Roundtable member Scott Black.

 

DJIA: +1.65% to 34,725.47 S&P 500: +2.43% to 4,431.85 Nasdaq: +3.13% to 13,770.57 The Hot Stock: Visa +10.6% The Biggest Loser: Western Digital -7.3% Best Sector: Technology +4.4% Worst Sector: Energy -0.4%