Daily Stock Market Reports

Stocks give back gains, Dow sheds more than 400 points as January rally loses steam


Traders work on the floor of the New York Stock Exchange during morning trading on January 17, 2023 in New York City. 

Michael M. Santiago | Getty Images

Stocks gave back earlier gains on Wednesday as investors hit the brakes on the new year’s rally, now in its third week.

The Dow Jones Industrial Average fell 436 points, or 1.3%, while the S&P 500 lost 1%. The Nasdaq Composite lost 0.8% and was on pace for its first down day in the last eight.

Yung-Yu Ma, chief investment strategist at BMO Wealth Management, attributed the reversal to a combination of skittishness and profit taking.

“We’ve had such a strong start to the year, but now we’re amid a tense earnings season, recently got weaker data — retail sales and yesterday’s Empire State Manufacturing Survey. Plus the Fed meeting on Feb. 1st is looming large,” he said. “There’s not a whole lot of reason to get aggressive here, but all of those factors above suggest that caution is warranted in the near term.”

The Dow Jones Industrial Average on Wednesday

Microsoft announced plans to lay off about 10,000 employees, which hurt investor sentiment. The stock fell and dragged the Dow lower with it.

Investors were also digesting the latest reading on the producer price index, which measures input costs from companies. The PPI showed a 0.5% decline for December. Economists surveyed by Dow Jones expected a 0.1% decline. That briefly gave relief to investors who have hoped for inflation to retreat and for the Federal Reserve to slow its rate-hiking campaign.

Declining prices were also reflected in retail sales, which fell 1.1% in December, slightly more than the 1% forecast.

Investors have been enjoying strong upward momentum for stocks since the start of the year, although many have begun to doubt the market’s strength. The Dow is still higher by 1% for the month, while the S&P and Nasdaq are still up by 3% and 5%, respectively.



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