Stocks build on gains after reports of progress on Russia-Ukraine ceasefire talks

By Admin On Mar 29, 2022 23

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Wall Street’s main benchmarks pushed higher Tuesday, extending gains from the previous session amid reports Russia promised to scale down its military operations around Kyiv and northern Ukraine.

The S&P 500 advanced 1%, and the Dow Jones Industrial Average jumped 400 points. The Nasdaq Composite was up 1.4%, buoyed by a comeback in technology stocks. Big names in the sector — Tesla, Amazon, and Apple — each rallied during intraday trading Monday following a rough start to the year stoked by a risk-off sentiment amid a liftoff in interest rates by the Federal Reserve.

“Corporate America is in excellent shape — earnings estimates are higher in 2022 now than they were at the start of the year, which is no small feat,” LPL Financial equity strategist Jeff Buchbinder said in a note, adding, however, that the positive outlook was not without risks, particularly around the Fed’s inflation fight. Buchbinder pointed out the S&P 500 registered a 19% correction when the Federal Reserve last bumped rates up three years ago.

“We saw in 2018 what can happen when the market thinks the central bank is getting too aggressive,” he said. “And certainly we would not dismiss the potential for an escalation of the war in Europe and a broader conflict.”

Also weighing on corporate earnings is a slowdown in economic expansion and a challenging margin environment set forth by wage pressures, supply chain woes, materials and labor shortages, and rising commodity price, LPL Financial noted. These factors could make big earnings upside for companies to achieve and leave valuations to do the heavy lifting — but those valuations may not offer enough support to prop the S&P 500 up to 5,000 at year-end.

F.L. Putnam chief market strategist Ellen Hazen echoed a similar view on Yahoo Finance Live Monday.

“As we see inflation across the board for companies, we expect margins to continue to be under pressure,” Hazen said.

Inflation worries are also mounting for everyday Americans. The Conference Board’s Consumer Confidence Index due for release on Tuesday will show a timely snapshot of their thinking following the latest spike in prices. Economists surveyed by Bloomberg are looking for the index to fall to 107.0 for March following a read of 110.5 last month.

There will also be a new read on labor demand with the Job Openings and Labor Turnover Survey (JOLTS) for February scheduled for release Tuesday morning. Analysts are expecting 11 million vacancies, little changed from January’s 11.26 million openings. The results will jump start a week of fresh jobs data for March, which includes ADP’s private payrolls (out on Wednesday) and the crucial jobs report (Friday).

Investors got some relief on Monday as the CBOE Volatility Index (^VIX), which measures volatility and serves as a gauge of market sentiment, dipped. Wall Street’s “fear index,” better known as the VIX, settled below 20 for the first time since January after hovering at elevated levels in recent weeks.

Meanwhile, oil prices tanked on Monday after Shanghai implemented a lockdown to curb a surge in COVID-19 infections, renewing fears of a slowdown in demand. WTI Crude Oil futures (CL=F) plunged 9.2% to settle at around $103 per barrel, recording their biggest drop in two weeks.

The war in Ukraine remains on the radar for investors. The Kremlin said Monday that peace talks between Russia and Ukraine may continue this week when officials from both countries meet in Turkey on Tuesday.

“While we cannot and will not speak about progress at the talks, the fact that they continue to take place in person is important, of course,” Kremlin spokesperson Dmitry Peskov told reporters on a conference call.

Peskov added that no major progress had been made in the talks themselves or the possibility of a face-to-face meeting between Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskyy.

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10:09 a.m. ET: Nielsen sold to PE consortium in $16 billion buyout deal

TV ratings giant Nielsen (NLSN) has been acquired by a group of of private equity firms, led by Elliott Management affiliate Evergreen Coast Capital Corp. and Brookfield Asset Management in an all-cash deal that values the company at $16 billion, including debt.

The deal offers $28 per share share of Nielsen, a premium of 60% since early March when the deal talks were first reported.

The acquisition comes days after the video and TV-ratings firm declined a takeover bid from a group of private equity firms. Nielsen did not name the suitors, but the offer was made by PE companies including Elliott Management.

Shares of Nielsen soared 21% to trade at $26.89 per share as of 10:08 a.m. ET.

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9:30 a.m. ET: Stocks extend advances amid progress on Russia-Ukraine ceasefire talks

Here’s how the main indexes opened at the start of trading Tuesday:

S&P 500 (^GSPC): +43.86 (+0.96%) to 4,619.38
Dow (^DJI): +376.03 (+1.08%) to 35,331.92
Nasdaq (^IXIC): +166.96 (+1.16%) to 14,521.86
Crude (CL=F): -$5.80 (-5.47%) to $100.16 a barrel
Gold (GC=F): -$44.30 (-2.28%) to $1,895.50 per ounce
10-year Treasury (^TNX): -5 bps to yield 2.4270%

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9:17 a.m. ET: Robinhood offers clients additional trading time for pre- and post-market

Online brokerage Robinhood is extending trading hours for its users from 7 a.m. to 8 p.m. ET in order to allow them to trade during pre-market and after-hours sessions.

Pre-market trading will be available on the app 2.5 hours before markets open at 9:30 a.m., and after-hours trading continues for 4 more hours, until 8:00 p.m. ET, giving investors on the platform an extra six and a half hours of trading.

The company cited post-market quarterly earnings announcements from some companies and activity in foreign markets — such as Asian or European markets — that can influence prices on U.S. stocks among reasons for the extended trading hours.

Robinhood Markets, Inc. CEO and co-founder Vlad Tenev and co-founder Baiju Bhatt pose with Robinhood signage on Wall Street after the company's IPO in New York City, U.S., July 29, 2021. REUTERS/Andrew Kelly — Robinhood Markets, Inc. CEO and co-founder Vlad Tenev and co-founder Baiju Bhatt pose with Robinhood signage on Wall Street after the company’s IPO in New York City, U.S., July 29, 2021. REUTERS/Andrew Kelly

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9:05 a.m. ET: Home price growth picks back up in 2022

Home price growth accelerated in the first month of the year, reversing a slowing pace over the past few months.

Standard & Poor’s reported its S&P CoreLogic Case-Shiller national home price index registered a 19.2% annual gain in January, up from 18.9% in December.

The annual growth rate remains elevated — the fourth highest reading in 35 years. The 20-City Composite posted a 19.1% annual gain, up from 18.6% a month earlier. The 20-City results surpassed analysts’ expectations of a 18.55% annual gain, according to Bloomberg consensus estimates.

“Home price changes in January 2022 continued the strength we had observed for much of the prior year,” said Craig J. Lazzara, managing director and global head of index investment strategy at S&P DJI, in a statement. “Last fall we observed that home prices, although continuing to rise quite sharply, had begun to decelerate. Even that modest deceleration was on pause in January.”

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