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24/01/24 Briefing

Wall Street ended higher on Monday, driven by a surge in oil prices due to supply concerns, which propelled the Dow to a record-breaking 38,000. Joining this upward trend, both the S&P and the Nasdaq indexes also closed in positive territory.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) rose 0.4%, or 138.01 points, to close at 38,001.81 for the first time. Notably, 22 components of the 30-stock index ended in positive territory, while eight were in red. The major gainer of the blue-chip index was Walgreens Boots Alliance, Inc. WBA, which increased 2.6%. Walgreens Boots Alliance currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

The tech-heavy Nasdaq Composite finished at 15,360.29, rising 0.3%.

The S&P 500 gained 0.2% to end at 4,850.43. Eight out of 11 broad sectors of the benchmark ended in positive territory, while three were in the negative zone. The Industrials Select Sector SPDR (XLI), the Financials Select Sector SPDR (XLF) and the Real Estate Select Sector SPDR (XLRE) gained 0.8%, 0.5% and 0.5%, respectively, while the Utilities Select Sector SPDR (XLU) declined 0.5%.

The fear-gauge CBOE Volatility Index (VIX) decreased 0.83% to 13.19. A total of 11.9 billion shares were traded on Monday, higher than the last 20-session average of 11.4 billion. The S&P 500 posted 82 new 52-week highs and three new lows, and the Nasdaq Composite recorded 161 new highs and 130 new lows.

Dow Hits Record 38,000

The Dow Jones Industrial Average (DJIA) showcased a resilient and dynamic performance from 2022 to January 2024. In 2022, the market weathered initial volatility, closing at 34,678.35, reflecting its ability to withstand external pressures. The subsequent year witnessed growth amid occasional challenges, with the index reaching highs above 35,000 points and closing the year at 38,001.81. As of Jan 22, 2024, the Dow continued its upward trajectory, closing at 38,001.81 points, and achieving a historic milestone by surpassing the 38,000 mark for the first time. Throughout this period, global economic conditions, pandemic recovery efforts, and monetary policies played key roles in shaping the Dow's performance.

Oil Prices Surge on Supply Concerns

Oil prices rose about 2% on Monday, driven by a Ukrainian drone strike on Russia's Novatek fuel terminal and cold weather disruptions that affected U.S. crude production. Brent March crude futures settled at $80.06 per barrel, reflecting a 1.9% increase, while the U.S. West Texas Intermediate crude futures for February delivery closed at $75.19, up 2.4% as the contract expired. The attack on Novatek's terminal raised concerns about genuine supply disruptions.

The severe cold weather prevailing across the United States has resulted in limitations to oil output, particularly affecting regions like North Dakota, where more than 20% of production remains suspended due to extreme weather conditions and operational difficulties.

In addition to these factors, geopolitical tensions, including the Israeli offensive in Gaza and the ongoing attacks by Iran-aligned Houthis on commercial vessels in the Red Sea, are contributing to the complex global energy landscape.

Economic Data

The Conference Board reported that the U.S. leading indicator declined 0.1% month over month in December 2023 to an index value of 103.1. The consensus estimate was for a decline of 0.3%. In November, the indicator fell 0.5% month over month compared with a drop of 1% reported in October.

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