Happy New Year: Wall Street indices up over 2% after positive jobs report

Amid the possibility of recession and the Fed going for more interest rate hikes, the stocks at Wall Street continued their losing streak on Wednesday with the S&P 500 falling for fifth session.

The S&P 500 was down 0.19 percent to end the session at 3,933.92. The Dow Jones Industrial Average was mostly flat with a meagre gain of 1.58 points and closed at 33,597.92. The Nasdaq Composite fell 0.51 percent to end at 10,958.55.

During the current week, the Dow is down 2.42 percent while the S&P 500 and Nasdaq are off by 3.38 percent and 4.39 percent respectively.

By the time trading was closed, the S&P 500 shed 1.44 percent to close at 3,941.26 and the Nasdaq Composite sank 2 percent to finish at 11,014.89. The Dow Jones Industrial Average dropped 350.76 points, or 1.03%, to settle at 33,596.34.

Earlier on Tuesday, the S&P 500 shed 1.44 percent to close at 3,941.26 and the Nasdaq Composite sank 2 percent to finish at 11,014.89. The Dow Jones Industrial Average dropped 350.76 points, or 1.03 percent, to settle at 33,596.34.

Meanwhile, bond yields also fell on Wednesday, with the rate on the 10 years Treasury note at one point touching a low of 3.402 percent.

Stocks wavered between gains and losses in choppy trading, with the S&P rising as much as 0.41%. At its lows, the benchmark index fell 0.47%.

“The market’s kind of bobbing and weaving and finding its breath after the big rally off the October lows,” said Ryan Detrick, chief market strategist at the Carson Group.

He says markets will continue with this trend until investors receive more clarity from the Fed’s December policy meeting and November’s consumer price index report.

Next week, the central bank is widely expected to deliver a 50 basis point rate hike. While the move would be a smaller one compared to the previous four rate hikes, concerns are swirling over whether the Fed can engineer a so-called soft landing while successfully tamping down inflation.

In this scenario, worries about a recession in 2023 have spooked some investors in recent days.

“All told, financial indicators point to a recession on the horizon,” wrote Wells Fargo’s Azhar Iqbal in a note to clients Wednesday.

“The S&P 500 has peaked ahead of recessions with an average lead time of four months over the past few business cycles.”

Investors await more economic data this week for clues on what to expect from the Fed, with jobless claims data due out Thursday. November’s producer price index and preliminary consumer sentiment data for December are slated for Friday.

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