Stock Market Today: Stocks Gain Ahead of Fed Meeting
Exxon Mobil (XOM) and General Motors (GM) both popped after reporting solid earnings.
Stocks closed higher Tuesday as investors parsed the latest round of earnings and economic data.
One of the day's most notable earnings reports came from Exxon Mobil (XOM), with the energy giant reporting record profits for all of 2022. And on the economic front, a welcome reading on inflation hit the newswires as the Federal Reserve kicked off its first policy meeting of 2023.
Taking a closer look at XOM's earnings, the oil major said it brought in $12.9 billion in profit in the fourth quarter, bringing its full-year earnings to $55.7 billion. On a per-share basis, Q4 earnings of $3.09 fell short of the consensus estimate. Still, the energy stock rose 2.2% on the day.
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.
Another big earnings mover on Tuesday was General Motors (GM), which jumped 8.3% after the carmaker said fourth-quarter earnings increased 57% year-over-year to $2.12 per share. Revenue was up 28.4% to $43.1 billion – easily beating analysts' expectations.
As for that economic data, the Labor Department this morning said its employment cost index (ECI), which measures labor costs, rose 1.0% in the fourth quarter. This was slower than the 1.2% rise seen in the third quarter and below what economists were expecting. "The move in the right direction will be welcomed by the Fed but it still remains elevated, and this won't do anything to change the Fed calculus in the near-term," says Michael Reinking, senior market strategist at the New York Stock Exchange. And that calculus, as the market is expecting, will be the Fed's announcement tomorrow afternoon of a 25 basis point (0.25%) interest rate hike.
At the close, the Dow Jones Industrial Average was up 1.1% at 34,086, the S&P 500 was 1.5% higher at 4,076, and the Nasdaq Composite had added 1.7% to 11,584.
The Closed-End Funds to Buy
The stock market ended January with impressive gains. The Dow rose 2.8%, the S&P 500 rallied 6.2%, and the Nasdaq surged 10.7%. "What had been expected as dip and rip this year may be playing out as rip and dip as the markets continue to advance due to evidence of declining inflation," says Phillip Toews, CEO of Toews Asset Management. However, with the market pricing in potential rate cuts later this year, "investors are assuming a best-case scenario, so risks are to the downside." In other words, the volatility we've seen in the stock market over the last 12 months could be far from over.
Investors have many ways to play defense against the ups and downs of this market, including embracing income-paying investments. The Dividend Aristocrats – widely considered Wall Street's best dividend stocks due to their decades of consistent payout growth – are a good place to find dependable income payers. Meanwhile, real estate investment trusts (REITs) and healthcare stocks are loaded with names sporting generous yields. As for investors looking to take a less well-worn path, they might want to check out the best closed-end funds (CEFs) too. These high-yield funds can significantly boost your income and allow you to buy the underlying stocks and bonds at a discount.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at Schaeffer's Investment Research. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.
-
How Lower Interest Rates Will Help the Housing Market
Lower interest rates will give the industry life again as they will likely create more demand and more incentives for developers and thaw a static market.
By Zain Jaffer Published
-
Six Year-End Strategies That Will Better Prepare You for Your 2024 Taxes
A little effort now can save you tons of stress in the coming months.
By Kiplinger Advisor Collective Published
-
Stock Market Today: Dow Logs Longest Losing Streak Since April
The November Producer Price Index showed that inflation remains a tough beast to tame.
By Karee Venema Published
-
Stock Market Today: Tech Stocks Rally as CPI Supports Lower Rates
An inline inflation report sealed the deal for a December rate cut and sent the tech sector soaring.
By Dan Burrows Published
-
CPI Report Casts Doubt on Rate Cuts in 2025: What the Experts Are Saying About Inflation
CPI November Consumer Price Index data sealed the deal for a December rate cut, but the outlook for next year is less certain.
By Dan Burrows Published
-
Stock Market Today: Stocks Shrink From Highs as CPI Looms
The Nasdaq hit a new record early Tuesday but drifted lower into the closing bell.
By David Dittman Published
-
Stock Market Today: Markets Reflect Global Uncertainty
Exuberance fades as investors confront micro challenges and a murkier macro environment.
By David Dittman Published
-
Stock Market Today: Nasdaq Nabs New High After Jobs Data
The S&P 500 also closed at its highest level ever, while the Dow Jones Industrial Average was pressured by another down day for UnitedHealth stock.
By Karee Venema Published
-
Rebound in Jobs Growth Keeps Fed on Track: What the Experts Are Saying
Jobs Report No nasty surprises in the November payrolls data leaves a quarter-point cut in play.
By Dan Burrows Published
-
Stock Market Today: Stocks Pause Near Highs Ahead of Jobs Friday
Investors await a key data set with sentiment still broadly positive.
By David Dittman Published