A trader works on the trading floor of the New York Stock Exchange (NYSE) on January 5, 2023.
Andrew Kelly | Reuters
Stocks rose on Monday as investors tried to build on one Sharp rally from previous session.
The Dow Jones industrial average rose 120 points, or 0.4%, while the S&P 500 and Nasdaq composite added 0.7% and 1.4%, respectively.
It follows a winning week for the three major indexes, with the Dow and S&P 500 posting their best weeks since November. Part of those gains came on Friday, when the Dow rallied 700 points, while the S&P 500 and Nasdaq advanced 2.3% and 2.6%, respectively. Those gains were fueled by the latest economic data released on Friday.
Nonfarm payrolls came in slightly higher than expected, but wages rose at a slower pace than expected. That, along with data showing a contraction in the services sector, raised hopes that the central bank’s rate hikes were serving their purpose of cooling the economy.
That data helped investors shake off pessimism earlier in the week following minutes from the December Fed meeting, in which officials said interest rates were expected to rise. “Just a little while.”
“If last week is any indication, the factors that drove much of 2022’s market action — inflation and the Fed’s response to it — will continue to exert their influence this year,” said Chris Larkin, managing director of trading at Morgan Stanley’s E-. Trade. “The market’s day-to-day swings last week could signal a larger, longer-term pullback that could play out this year.”
Investors will look to consumer expectations and consumer credit data later in the day. They will also watch for December’s consumer price index report due on Thursday and big bank earnings scheduled for Friday.