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Stock Market News for Jan 24, 2023

U.S. stocks closed higher on Monday, led by a tech rally, as investors geared up for a busy week of earnings and grew optimistic about the Fed going slow on its interest rate hikes in the coming months. All three major indexes ended in positive territory.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) gained 0.8% or 254.07 points to close at 33,629.56 points.

The S&P 500 rose 1.2% or 47.2 points to finish at 4,019.81 points. Communication services and tech stocks were the biggest gainers.

The Communication Services Select Sector SPDR (XLC) gained 1.8%. The Technology Select Sector SPDR (XLK) rose 2.3%. All 11 sectors of the benchmark index ended in positive territory.

The tech-heavy Nasdaq jumped 2% or 223.98 points to end at 11,364.41 points.

The fear-gauge CBOE Volatility Index (VIX) was down 0.20% to 19.81. Advancers outnumbered decliners on the NYSE by a 2.77-to-1 ratio. On Nasdaq, a 1.73-to-1 ratio favored advancing issues. A total of 11.99 billion shares were traded on Monday, higher than the last 20-session average of 10.62 billion.

Investors Optimistic Ahead of Fed’s Meeting

Investors started a fresh week with renewed vigor as they are growing optimistic ahead of the Fed’s policy meeting in February. They are weighing on the possibility that the Fed might slow its pace of rate hikes after going with an aggressive rate-hike policy in 2022. The central bank already gave hint by increasing the interest rate by 50 basis points after four consecutive 75-basis point rate hikes.

Also, data released last week showed that wholesale prices declined in December, which is a sign of easing inflation. Also, Fed Governor Christopher Waller’s comments on Friday indicated that he prefers a 25-basis point quarterly rise in interest rates. These have made investors optimistic.

Also, investors braced for a busy week of earnings on Monday. A large number of tech companies are scheduled to report earnings this week. Monday’s rally was also driven by tech stocks ahead of earnings. Shares of International Business Machines Corporation IBM gained 0.5% ahead of announcing its quarterly results this week.

Shares of Apple Inc. AAPL gained 2.4% on hopes that the reopening in China will help the smooth functioning of its business after taking a major blow over the past couple of months owing to the COVID-induced lockdown. Apple has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

No economic data was released on Monday.

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