Finance

Main indexes trade mixed ahead of key data releases

9 months ago
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  • Wall Street’s main indexes hit new all-time highs last week.
  • S&P 500 and Nasdaq Composite eased on Monday.
  • The US economic calendar will feature key data releases later in the week.

The S&P 500 (SPX) index fell 0.38% to close the session at 5,069.53. The Dow Jones (DJIA) dropped 0.16% to end at 39,069.23, while the Nasdaq (IXIC) lost 0.13% to finish at 15,976.25.

Stock market news

  • The Energy Sectorrose 0.32% on Monday as the best-performing major S&P sector for day. On the other hand, the Utilities Sector fell 2.1%.
  • Palo Alto Networks Inc. (PANW) and Domino’s Pizza Inc. (DPZ) shares were the top S&P 500 gainers on Monday, rising 7.33% and 5.84%, respectively. Insulet Corp. (PODD) lost nearly 8.4% on the day as biggest decline, closely followed by Alphabet Class C and Class A shares, shedding 4.5% and 4.4% apiece.
  • Dow Jones and S&P 500 both closed at new all-time highs on Friday, gaining 1.3% and 1.6% on a weekly basis. Profit-taking caused the Nasdaq Composite to close the last trading day of the week in negative territory, but the index added 1.4% for the week.
  • Nvidia Corp. (NVDA) shares hit a new record-high of $823.94 but pulled back in the back half of the trading day to finish at $788.17. After rising nearly 8% in the previous week, NVDA clings to modest daily gains slightly below $800 on Monday.
  • The chipmaker had reported on Wednesday that earnings per share topped $5.16 versus the $4.64 forecast, while revenue climbed to $22.10 billion compared to the expected $20.62 billion. The company also said that it forecasts the current-quarter revenue of $24 billion, plus or minus 2%. Mizuho has raised the target price for Nvidia stock to $850 from $825, HSBC lifted its target to $880 from $835 and Citigroup revised its expectation to $820 from $575.
  • The US Treasury will hold 2-year and 5-year note auctions later in the day. 
  • On Tuesday, January Durable Goods Orders data will be featured in the economic calendar before the US Bureau of Economic Analysis releases the second estimate of the Gross Domestic Product (GDP) growth for the fourth quarter on Wednesday. Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s (Fed) preferred gauge of inflation, figures will be scrutinized by market participants on Thursday. 
  • New York Fed President John Williams said on Friday that he expects the US central bank to start lowering the policy rate in the second half of the year. According to the CME FedWatch Tool, markets are pricing in a nearly 80% probability that the Fed will leave the policy rate unchanged at 5.25%-5.5% in the next two meetings. 
  • Workday, Inc. (WDAY) and ONEOK Inc. (OKE) are among the top companies that will report quarterly earnings after the closing bell on Monday.

Dow Jones FAQs

The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.

Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.

Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.

There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.

Source: https://www.fxstreet.com/news/stock-market-today-us-futures-point-to-a-flat-opening-on-monday-202402261029