Monday, March 28, 2022

DJIA: 34,955.89, up 94.65
S&P 500: 4,575.52, up 32.46
Nasdaq: 14,354.90, up 185.60

Stocks fall; oil settles above $100/barrel

U.S. stocks finished near their best levels of the session on Monday, extending a two-week winning streak. The S&P 500 climbed 0.7%, back within 4.7% of its January 3 record, while the Dow added 94 points. The Nasdaq Composite jumped 1.3% amid strength in tech-related shares. Notably, the CBOE Volatility Index (VIX) settled below 20 for the first time since mid-January. Oil prices eased, with West Texas Intermediate crude falling 9.4% to $103.25/barrel amid worries that COVID-19-related lockdowns in China would pressure demand.

Concerns over the economic growth outlook lingered as some portions of the U.S. Treasury yield curve inverted–a scenario in which shorter-term yields surpass longer-term rates. The spread between five-year notes and 30-year bonds briefly turned negative for the first time since 2006. The yield on the 10-year note ended three basis points (0.03%) lower at 2.45%. On the data front, an update from the Dallas Fed showed manufacturing activity in the region deteriorated more than projected in March. In geopolitical news, investors eyed the next round of ceasefire talks between top Russian and Ukrainian officials, slated for tomorrow.

Eight of 11 S&P 500 sectors closed in positive territory, with cyclical-oriented groups lagging. Consumer Discretionary shares outperformed, with Tesla Inc. soaring 8% after taking steps to enable a stock split and eventual dividend payout. Technology was also among the standouts. Apple Inc. rose 0.5% despite planning to reduce production of its iPhone SE by 20% next quarter. In the M&A space, communications technology company Poly (formerly Plantronics Inc.) surged 52.6% after agreeing to be acquired by HP Inc. for $3.3 billion.

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