Stocks Fluctuate to Begin Month as Investors Digest Data, Earnings

U.S. equity markets wavered to begin the new month, reflecting investors' uncertainty over issues ranging from the impact of corporate earnings to how Fed rate hikes will shape the economy this year.  

UPS Inc. (UPS) is the best-performing stock in the S&P 500 on its earnings news. Better-than-expected earnings are also lifting shares of Exxon Mobil Corp. (XOM). That’s boosting shares of other energy companies as well. Shares of cruise lines, airlines, and other travel-related companies are advancing on decreasing omicron variant case numbers.

Key Takeaways

  • U.S. equity markets wavered to begin the new month, with all three major indexes fluctuating between green and red.
  • The quit rate fell for the first time since Dec. 2020.
  • Ups and downs reflect investors' uncertainty over issues ranging from the impact of corporate earnings, Fed rate hikes, and ongoing supply chain and pandemic concerns.
  • The yield on the 10-year Treasury note has widened and narrowed throughout the day and is currently lower.

Tech shares, which led the end of January rally, are lower. Shares of Microsoft Corp. (MSFT) and Salesforce Inc. (CRM) are sliding more than 1%. Shares of AT&T Inc. (T) are falling after the company announced plans to spin off the WarnerMedia unit and cut its dividend. 

 Bond Yields Increase

The yield on the 10-year Treasury note has swung between 1.74% and 1.8% is currently lower. Oil prices have also fluctuated all day, while natural gas futures are retreating after hitting two-month highs yesterday. 

The price of Bitcoin is up 1%, and other major cryptocurrencies are trading higher as well, including Ethereum, up more than 3%. The India central bank announced its plan to issue a digital rupee by 2023. The euro has strengthened, marginally, versus the dollar.

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JOLTS Jump: Chart of the Day

fred jolts

Job openings in the U.S. rose to the third-highest level ever last month, as restaurants and other services businesses moved to bring on workers needed for the increased demand as COVID-19 restrictions eased. 

The Labor Department’s Job Openings and Labor Turnover Summary (JOLTS) showed 10.925 million positions available at the end of December, up from a revised 10.775 million the month before. 

The number of those who left their jobs dropped from the record high set in November. Quits totaled 4.3 million, a decline of 161,000, and the quit rate was little changed at 2.9%. This is the first time the quit rate has fallen since Dec. 2020, pointing to the fact that the "Great Resignation" may be slowing.

Largest Increases in Openings

The largest increase in job openings was in the accommodation and food services industry, higher by 133,000 postings. Other industries with big gains included the information sector (+40,000), nondurable goods manufacturing, and state and local government education (+31,000 each). 

The industries with the biggest declines in job openings were finance and insurance (-89,000) and wholesale trade (-48,000).

United Parcel Service (UPS): Stock of the Day

United Parcel Service (UPS) shares are soaring after the biggest package delivery company reported record earnings in the holiday quarter, raised its full year sales forecast, and increased its dividend by 49%. 

UPS said fourth quarter profit was $3.59, while revenue increased 11.5% to $27.77 billion. Both were above analysts’ forecasts.

 UPS pointed to higher shipping prices for the boost in sales.

 UPS added that it expects 2022 revenue to be $102 billion, also more than expected. It anticipates operating margins of 13.7%, better than last year, despite higher costs for fuel and labor.   

Boosting Dividend

The company is raising its quarterly dividend to $1.52 from the current $1.02. It also plans at least $1 billion in share repurchases this year.  

Shares of UPS are up 14% and are now trading at their all-time high.

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