U.S. Stocks Move Mostly Higher Amid Steep Drop By Oil Prices
Stocks have moved mostly higher over the course of morning trading on Monday, partly offsetting the weakness seen last week. The Dow has shown a strong move to the upside, while the tech-heavy Nasdaq is posting a more modest gain.
In recent trading, the Dow and the S&P 500 reached new highs for the session. While the Dow is up 333.15 points or 1 percent at 33,277.34 and the S&P 500 is up 28.11 points or 0.7 percent at 4,232.42, the Nasdaq is up 14.97 points or 0.1 percent at 12,858.78.
The strength on Wall Street comes amid a steep drop by the price of crude oil, as stocks have largely moved inversely to oil prices in recent sessions.
Crude for April delivery is plunging $8.10 to $101.23 a barrel amid optimism about peace talks between Russia and Ukraine, which are continuing today.
Meanwhile, a spike in treasury yields is limiting the upside for tech stocks ahead of the Federal Reserve’s monetary policy announcement on Wednesday.
With the Fed widely expected to raise interest rates by 25 basis points, traders will pay close attention to the accompanying statement for clues about further rate hikes.
The central bank is likely to continue raising rates over the comings months in an effort to combat elevated inflation, although the economic impact of the Russia-Ukraine conflict may affect the pace.
Banking stocks are spiking along with treasury yields, with the KBW Bank Index soaring by 3.1 percent. The rally by banking stocks comes as the yield on the benchmark ten-year note has surged to its highest level in well over two years.
Significant strength has also emerged among airline stocks, as reflected by the 2.1 percent jump by the NYSE Arca Airline Index.
Brokerage, pharmaceutical and chemical stocks are also seeing considerable strength on the day, while energy stocks are moving sharply lower along with the price of crude oil.
Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index is down by 4.3 percent, the NYSE Arca Natural Gas Index is down by 3.1 percent and the NYSE Arca Oil Index is down by 2.3 percent.
A notable decrease by the price of gold is also weighing on gold stocks, with the NYSE Arca Gold Bugs Index slumping by 2.8 percent.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan’s Nikkei 225 Index climbed by 0.6 percent, while China’s Shanghai Composite Index tumbled by 2.6 percent.
Meanwhile, the major European markets have all moved to the upside on the day. While the German DAX Index has surged by 2.8 percent, the French CAC 40 Index is up by 2 percent and the U.K.’s FTSE 100 Index is up by 0.6 percent.
In the bond market, treasuries have moved sharply lower after ending the previous session roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 10.2 basis points at 2.106 percent.
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