By Vivien Lou Chen and Barbara Kollmeyer
S&P 500, Dow, Nasdaq all post their biggest gains since Dec. 27
The Dow Jones Industrial Average and S&P 500 Index swept to record closes on Monday, driven by optimistic investors during the first day of trading in 2022, while joining the Nasdaq Composite in posting the biggest gains in a week. Among stocks on the move, shares of Tesla surged after record-breaking quarterly sales.
How did stock indexes trade?
For last year, the S&P 500 soared 26.9%, beating both the Nasdaq's 21.4% rise and the Dow's 18.7% climb.
Read: The S&P 500 beat both Dow, and Nasdaq in 2021 by the widest margin in 24 years. Here's what history says happens in 2022
What drove the stock market?
Stocks finished higher after a bumpy start to the session amid a number of lingering concerns -- including the surge in COVID-19 cases spurred by the rapid spread of the omicron coronavirus variant and the likelihood of multiple interest-rate hikes by the Federal Reserve, expected later this year.Read: Odds of a March rate hike by the Federal Reserve are back above 50%Financial markets were reflecting "broad optimism that the economy can weather omicron, as well as rate hikes from the Fed," said Tom Garretson, senior portfolio strategist at RBC Wealth Management, citing the resteepening of the Treasury yield curve to levels last seen around November. "The economic outlook should be strong enough to support all those things," he said via phone. The Nasdaq Composite Index led the way Monday among stock benchmarks as "most investors take a more optimistic view on large-cap tech companies being potentially able to adapt to pandemic conditions," said Timothy Chubb, chief investment officer at Girard, a wealth advisory firm in King of Prussia, Pennsylvania.Even as Treasury rates rose across the board, the historically negative correlation between higher yields and the Nasdaq index "hasn't necessarily held today," Chubb said via phone.
Travel chaos greeted the start of the year, with more than 2,600 U.S. flights canceled on Sunday, amid winter storms and shortages of workers due to the fast-spreading omicron variant. Federal offices were also shut in Washington, D.C, as winter weather bore down on the mid-Atlantic.
The final reading of the IHS Markit purchasing managers index for manufacturing edged down to 57.7 from an initial reading of 57.8.
Separately, spending on construction projects rose 0.4% in November at a seasonally adjusted annual rate of $1.63 trillion, the Commerce Department reported Monday. Economists polled by The Wall Street Journal had expected a 0.7% increase. Spending in October was raised to a 0.4% gain from the prior estimate of a 0.2% rise.
Which companies were in focus?
How did other assets trade?
Mark DeCambre and Mike Murphy contributed to this article
-Vivien Lou Chen
(END) Dow Jones Newswires
January 03, 2022 16:48 ET (21:48 GMT)
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