A trader works on the trading floor of the New York Stock Exchange (NYSE) on January 5, 2023.
Andrew Kelly | Reuters
Stocks rallied for a second straight session on Monday as traders tried to recoup some of the ground lost in 2022.
The Nasdaq Composite had the biggest advance of 2.1%, led by a 7% gain in Tesla shares. The Dow Jones industrial average rose 217 points, or 0.6%. The S&P 500 gained 1.2%.
It follows a successful shortened week for the three major indexes, with the Dow and S&P 500 posting their best weeks since November. A Part of those gains came FridayThe S&P 500 and Nasdaq advanced 2.3% and 2.6%, respectively, with the Dow up 700 points.
Friday’s gains were fueled by the latest economic data. 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 would serve 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.”
“Even the Fed is starting to signal to the markets that the job is almost done,” said Jamie Cox, managing partner at Harris Financial Group. “This is contributing to the positives in the markets.”
Monday marks the fifth trading day of 2023, a reminder for investors A classic Wall Street rule If the stock performs well in the first five sessions, the market suggests that the year will end. According to the Stock Trader’s Almanac, the S&P 500 ended positive 83% of the time over the first five trading sessions — and with an average gain of 14%.
Investors will look to consumer credit data due 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.