Stock Market Today: Stocks Jolted Awake as Oil Enters Bear Market
Oil slumps below $100 per barrel and into bear territory, providing the equity market with some much-needed relief.
Another precipitous decline in oil prices, as well as hints of an easing in other inflationary pressures, managed to snap losing streaks across the major indexes Tuesday.
U.S. crude oil futures continued their recent dive, shedding 6.4% to $96.44 per barrel – enough to put the commodity into bear-market territory from its March 8 highs. Oil was dragged down by ongoing peace talks between Ukraine and Russia, as well as a surge in China's COVID-19 caseload, which could spark additional shutdowns that could reduce demand.
Also Tuesday, the Bureau of Labor Statistics reported that February's U.S. producer prices increased 0.8% month-over-month (10% year-over-year), coming in slightly less hot than expectations for 0.9% growth.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"Prices excluding food, energy and trade rose only modestly, suggesting some easing in core inflation," says Barclays economist Pooja Sriram. However, she warns the relief might be short-lived.
"We expect to see increased momentum in food prices going ahead, due to the disruption in food supply caused by the Ukraine-Russia conflict. Energy prices are also likely to contribute solidly to both producer and consumer price pressures in the near term given the swings in oil prices."
After a dismal Monday session, tech stocks (+3.4%) and consumer discretionary companies (+3.4%) were out in front of Tuesday's rally. The Nasdaq soared 2.9% higher to 12,948, followed by the S&P 500 (+2.1% to 4,262) and Dow (+1.8% to 33,544).
Other news in the stock market today:
- The small-cap Russell 2000 rallied 1.4% to 1,968.
- Gold futures retreated 1.6% to end at $1,929.70 an ounce.
- Bitcoin advanced 2.4% to $39,767.28. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
- AMC Entertainment (AMC) shot up 6.8% today after the movie chain said it agreed to buy a $27.9-million stake in Denver-based gold miner Hycroft Mining Holding (HYMC). This works out to roughy 23.4 million HYMC shares and will give AMC an approximately 22% stake in the company. The news sparked major volatility in HYMC stock, which ended the day up 9.4% after nearly doubling at one point, AMC Entertainment CEO Adam Aron was scheduled to discuss the purchase on CNBC, but cancelled due to the wild volume in Hycroft shares today. "To state the obvious, one would not normally think that a movie theatre company’s core competency includes gold or silver mining," Aron said in AMC's press release. "In recent years, however, AMC Entertainment has had enormous success and demonstrated expertise in guiding a company with otherwise valuable assets through a time of severe liquidity challenge, the raising of capital, and strengthening of balance sheets, as well as communicating with individual retail investors. It is all that experience and skill that we bring to the table to assist the talented mining professionals at Hycroft."
- Airline stocks caught a bid today after several of the major carriers said bookings came in ahead of expectations, signaling increased travel demand. Delta Air Lines (DAL) jumped 8.7% after saying bookings are outpacing its 2019 numbers, while United Airlines (UAL, +9.2%) and American Airlines (AAL, +9.3%) also ended the day higher.
A Case for Small Caps
Many corners of the market are going to hinge sharply on how Russia's invasion of Ukraine plays out. But one area that might be set up for success either way is small-cap stocks.
Small caps have been severely beaten up since November, and the Russell 2000 Index of small companies has been in bear-market territory for more than a month. But BofA sees several reasons to be rosier on these stocks.
For one, they're a relative bargain compared to large caps, even after perking up from historical discounts a month ago. And Jill Carey Hall, head of U.S. Small/Mid Cap Strategy for BofA Securities, says that "while geopolitical conflict is typically a short-term negative for equities … we would continue to prefer domestically-oriented U.S. small caps over large caps in the current backdrop.
"History suggests that small caps outperformed on a cumulative basis over the full Cold War period, and saw particularly strong outperformance during the 1970s/early 80s," she adds.
Investors looking to dive right in might consider these 12 top small-cap stocks for 2022. But if the risk of investing in small individual companies seems a little high, you can always spread it over hundreds or even thousands of companies via small-cap exchange-traded funds (ETFs). These 10 small-cap ETFs in particular provide a wealth of ways to leverage companies that sport little market capitalizations, but mighty growth potential.
To continue reading this article
please register for free
This is different from signing in to your print subscription
Why am I seeing this? Find out more here
Kyle Woodley is the Editor-in-Chief of WealthUp, a site dedicated to improving the personal finances and financial literacy of people of all ages. He also writes the weekly The Weekend Tea newsletter, which covers both news and analysis about spending, saving, investing, the economy and more.
Kyle was previously the Senior Investing Editor for Kiplinger.com, and the Managing Editor for InvestorPlace.com before that. His work has appeared in several outlets, including Yahoo! Finance, MSN Money, Barchart, The Globe & Mail and the Nasdaq. He also has appeared as a guest on Fox Business Network and Money Radio, among other shows and podcasts, and he has been quoted in several outlets, including MarketWatch, Vice and Univision. He is a proud graduate of The Ohio State University, where he earned a BA in journalism.
You can check out his thoughts on the markets (and more) at @KyleWoodley.
-
Is a Phased Retirement Right for You?
Want to keep working, just not as hard? A phased retirement may just be the answer.
By Kimberly Lankford Published
-
Four Tips to Make Your Sales Presentation a Winner
Being prepared and not being boring can go a long way toward persuading a potential customer to buy into what you’re offering.
By H. Dennis Beaver, Esq. Published
-
Stock Market Today: Markets Rebound Ahead of Big Week for Earnings
Equities rallied on easing geopolitical tensions, upcoming quarterly results.
By Dan Burrows Published
-
Stock Market Today: Nasdaq Spirals as Netflix Nosedives
A big earnings boom for credit card giant American Express helped the Dow notch another win.
By Karee Venema Published
-
Stock Market Today: S&P 500, Nasdaq Extend Losing Streaks
The two indexes have closed lower for five straight sessions.
By Karee Venema Published
-
Stock Market Today: Dow Slips After Travelers' Earnings Miss
The property and casualty insurer posted a bottom-line miss as catastrophe losses spiked.
By Karee Venema Published
-
Why United Airlines Stock Is Flying Higher After Earnings
United Airlines beat expectations for the first quarter and its stock is by soaring. Here's what you need to know.
By Joey Solitro Published
-
Stock Market Today: Stocks Stabilize After Powell's Rate-Cut Warning
The main indexes temporarily tumbled after Fed Chair Powell said interest rates could stay higher for longer.
By Karee Venema Published
-
Stock Market Today: Stocks Reverse Lower as Treasury Yields Spike
A good-news-is-bad-news retail sales report lowered rate-cut expectations and caused government bond yields to surge.
By Karee Venema Last updated
-
Stock Market Today: Nasdaq Leads as Magnificent 7 Stocks Rise
Strength in several mega-cap tech and communication services stocks kept the main indexes higher Thursday.
By Karee Venema Published