U.S. Stocks Mixed in Early Trading as Market Focuses on Jobs and CPI Data

Deep News
Feb 09

U.S. stocks were mixed in early Monday trading, with the Dow Jones Industrial Average falling back below the 50,000-point mark. Investors prepared for delayed employment and Consumer Price Index (CPI) data releases, while also monitoring earnings reports from Coca-Cola and Ford. Several Federal Reserve officials are scheduled to speak later today.

The Dow Jones Industrial Average dropped 170.43 points, or 0.34%, to 49,945.24. The Nasdaq Composite rose 18.27 points, or 0.08%, to 23,049.48. The S&P 500 index declined 3.80 points, or 0.05%, to 6,928.50.

This follows a significant rebound in U.S. stocks on Friday, which recovered most of the substantial losses seen earlier in the week. Last week, technology stocks, particularly software shares, experienced selling pressure, and Bitcoin prices fell sharply. However, as investor risk aversion eased, the major indices reclaimed some lost ground.

On Friday, the Dow Jones Industrial Average surged by approximately 1,200 points, a gain of about 2.5%, closing above the 50,000 level for the first time ever. The S&P 500 index rose about 2%, and the Nasdaq Composite index also gained over 2%.

After dipping below $61,000 on Thursday evening, Bitcoin climbed back above $70,000 on Friday. Concurrently, software stocks like Salesforce closed higher.

Broadly, the iShares Expanded Tech-Software Sector ETF advanced 3.5%, marking its first gain since entering bear market territory at the end of last month.

Adam Turnquist, Chief Technical Strategist at LPL Financial, commented, "After eight consecutive days of declines, buyers finally returned to the software sector on Friday, supporting a much-needed rebound for the technology industry as it approached key support levels near the November lows. While this is a step in the right direction, the broader technology sector will likely remain range-bound until it clearly breaks above the December highs."

He added, "For the broader market to achieve sustained progress, regaining participation from the technology sector could be crucial."

He anticipates that without increased involvement from technology stocks, especially software shares, the S&P 500 will struggle to reach the 7,000-point level.

Monday's economic calendar is relatively light, although several Federal Reserve officials, including Governors Christopher Waller and Stephen Miran, are scheduled to speak later in the day.

On Wednesday, investors will closely monitor the delayed January employment report from the Bureau of Labor Statistics. Originally scheduled for release last Friday, the report was postponed due to a partial government shutdown. This follows last week's ADP report, which showed private sector employment increased by only 22,000 jobs in January, significantly below expectations. Economists surveyed by Dow Jones expect the closely-watched employment report to show an addition of 55,000 jobs for January.

Similarly delayed due to the government shutdown, the January Consumer Price Index (CPI) data is set for release on Friday. Market consensus expects a year-over-year increase of 2.5%.

Analysts suggest that if corporate earnings reports this week perform well, the recent trend of rotation away from technology stocks could potentially reverse.

Both Coca-Cola and Ford Motor are scheduled to report their earnings on Tuesday.

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