Stock Market Today: Energy Rises, Comms Fall on Mixed Monday

The stock market followed up on its best weekly performance of 2022 with an up-and-down Monday session.

A slow day on the data front allowed investors to further process last week's better-than-expected January jobs report; that benefited cyclical sectors including energy stocks (+1.3%), which led the way despite a 1.1% decline in U.S. crude oil futures, to $91.27 per barrel. However, communication stocks including Meta Platforms (FB, -5.1%) and Google parent Alphabet (GOOGL, -2.9%) weighed on the major indexes.

The Dow Jones Industrial Average finished marginally higher to 35,091, while the S&P 500 (-0.4% to 4,483) and Nasdaq Composite (-0.6% to 14,015) slipped, but by modest amounts.

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There'll be plenty more to watch later this week, however. Walt Disney (DIS) and Coca-Cola (KO) are among the noteworthy companies reporting earnings this week, and Thursday's consumer price index report will provide another important update on America's inflation situation.

UBS estimates more big numbers for CPI – 0.4% for the month, and a 7.2% 12-month rate – and believes CPI increases will remain elevated for the next few months. However, "in Q2, with rents starting to slow, and motor vehicle production and inventories gradually rising and weighing on vehicle prices, monthly core price increases should begin to slow more rapidly," UBS analysts say.

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Melissa Brown, global head of applied research at financial intelligence firm Qontigo, notes that another measure of inflation has actually remained quite low.

"The inflation issue highlights the stark contrast between Main Street and Wall Street. High reported inflation has dominated the news, and clearly consumers are hurting from higher prices. And this is what the Fed is looking to address," she says. "But breakeven inflation – a measure of future inflation expectations – remains relatively low, and has even fallen slightly since the beginning of the year.

"Investors setting the breakeven rates do not seem overly concerned and likely expect that realized inflation will fall – maybe because the effects are temporary, or maybe because the Fed acting will drive inflation back down."

Other news in the stock market today:

• The small-cap Russell 2000 finished decently in the green, gaining 0.5% to 2,012.
• Gold futures gained 0.8% to settle at $1,821.80 an ounce.
• Bitcoin continued to recover from last week's slump, rebounding 8.9% to $44,165.96. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
• Peloton (PTON) jumped 20.9% after a late-Friday report in The Wall Street Journal suggested the at-home fitness equipment maker has caught the eye of several high-profile suitors. The article cited people familiar with the matter, who listed e-commerce Amazon.com (AMZN) as one potential bidder, but said no deals have been made. "Assuming Peloton's founders and largest shareholders are open to a takeout (a key assumption), we would view Amazon and Apple (AAPL) as the more likely suitors for the company. For Amazon in particular, we see several potential benefits from a Peloton acquisition," says Truist Securities analyst Youssef Squali (Hold). Specifically, Squali points to the e-commerce giant's growing health and wellness segment, "clear and material synergies" with Amazon Prime and the fact that Peloton would likely win market share as a part of Amazon as reasons a potential AMZN-PTON marriage could work.
• Spirit Airlines (SAVE, +17.2%) and Frontier Group Holdings (ULCC, +3.5%) made headlines on M&A Monday after the two airlines said they agreed to combine in a cash-and-stock deal (including net debt and operating lease liabilities) worth roughly $6.6 billion. As part of the deal, SAVE shareholders will receive 1.9126 ULCC shares plus $2.13 in cash for each share owned. If the merger is approved, it will create the largest ultra low-cost airline in the U.S. The news helped boost other airline stocks today, including JetBlue Airways (JBLU, +3.6%), Southwest Airlines (LUV, +2.2%) and Alaska Air Group (ALK, +3.5%).

These Stocks Look "Agitated"

From time to time, we highlight groups of stocks that various types of experts have signed off on.

Our "Pros' Picks," for instance, detail which stocks are most popular among the Wall Street analyst crowd. We regularly keep you updated on what's floating around in Warren Buffett's Berkshire Hathaway portfolio, and we also keep tabs on stocks attracting a lot of hedge fund attention.

For the most part, all of these experts are fairly hands off – analysts research from the sidelines, and most big-money investors are typically happy to simply invest their money and leave it at that.

But a select few like to get more involved – these "activist investors" will build up stakes and agitate for changes they believe will unlock at least short-term (and sometimes long-term) value for shareholders, going so far at times as to replace board members or attempt to oust a CEO.

While they're not always successful, their mere presence can excite current and prospective shareholders alike, and sometimes, the policies they push through can result in meaningful returns. Today, we're highlighting seven stocks that have attracted activist investors, and explaining the changes that might be in store.