Tuesday, February 15, 2022

DJIA: 34,988.84, up 422.67
S&P 500: 4,471.07, up 69.40
Nasdaq: 14,139.76, up 348.84
Stocks snap three day losing streak

U.S. stocks snapped a three-day losing streak on Tuesday as signs of de-escalating geopolitical tensions in Ukraine helped fuel a relief rally. Russia reportedly returned some military units to their bases, while diplomatic talks are said to continue this week. Meanwhile, President Biden said that the U.S. is committed to diplomacy, but also warned of swift action if provoked as a Russian attack on Ukraine still remains a possibility. The Dow rose 422 points, while the S&P 500 advanced 1.6%. The Nasdaq Composite jumped 2.5%, with Technology shares leading the rebound. West Texas Intermediate crude slid 3.7% to $91.96/barrel.

Perceived safe havens retreated amid the apparent risk-on mood, with the U.S. dollar falling 0.4%. Treasuries weakened, with the yield on the 10-year note up five basis points (0.05%) to 2.05%. Inflation data also remained in focus. The Producer Price Index (PPI) climbed 1% in January, the most in eight months. The headline figure jumped 9.7% year-over-year, modestly below last month’s record 9.8% annual pace. Core PPI (excluding food and energy) came in at a hotter-than-expected 8.3% year-over-year. Separately, the empire manufacturing survey rebounded less than expected in February after slipping to the lowest level since May 2020 last month.

Nine of 11 S&P 500 sectors finished in positive territory, with Energy and Utilities the only laggards. Chipmakers were among the standouts, helped by merger and acquisition headlines. Tower Semiconductor Ltd. surged 42.1% after Intel Corp. said it would buy the Israeli company for $5.4 billion. Meanwhile, Constellation Brands Inc. slid 6.1% amid speculation that merger talks with Monster Beverage Corp. are progressing.

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