A trader works on the trading floor of the New York Stock Exchange (NYSE), January 5, 2023.
Andrew Kelly | Reuters
The stock rose on Monday as investors tried to build on a A sharp rise from the 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 comes after a winning week for the three major indices, with the Dow and S&P 500 posting their best weeks since November. Part of those gains came on Friday, as the Dow rose 700 points, while the S&P 500 and Nasdaq advanced 2.3% and 2.6%, respectively. The gains were driven by the latest batch of economic data released on Friday.
Nonfarm payrolls came in slightly above expectations, but wages rose at a slower pace than expected. This, and data showing a contraction in the services sector, reinforced hopes that the central bank’s interest rate hike would achieve the desired goal of calming the economy.
That data helped investors shake off pessimism earlier in the week after the release of minutes from the Fed’s December meeting, in which officials said interest rates needed to be raised in order to “sometimes.”
“If the past week is any indication, the factors that drove much of the market action in 2022 — 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. “Last week’s daily market volatility may symbolize the larger and longer-term tug-of-war that could happen this year.”
Investors will be watching consumer expectations and consumer credit data due later in the day. They will also be watching the upcoming December Consumer Price Index report on Thursday and the earnings of major banks due on Friday.