[New York Stock Market] Tech Stocks Rally Including Netflix... Nasdaq Up 2.66%

[Asia Economy New York=Special Correspondent Joselgina] Major indices of the U.S. New York stock market closed higher on Friday, the 20th (local time), as investor sentiment revived thanks to a rebound in tech stocks such as Netflix and Alphabet.

[Image source=Reuters Yonhap News]

On the day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 33,375.49, up 330.93 points (1.00%) from the previous session. The large-cap focused S&P 500 index rose 73.76 points (1.89%) to 3,972.61, and the tech-heavy Nasdaq index gained 288.17 points (2.66%) to close at 11,140.43.

Within the S&P 500, rallies were seen in communication, technology, and materials sectors. Netflix, which released a fourth-quarter subscriber increase exceeding market expectations the previous day, closed up 8.46% from the previous session. Google Alphabet, which announced plans to cut 12,000 employees?over 6% of its global workforce?jumped 5.34%. Leading tech stocks Tesla (+4.91%), Amazon (+3.81%), and Nvidia (+6.41%) also rose sharply.

Investors closely watched remarks from Federal Reserve officials, concerns over a recession due to Fed tightening, and corporate earnings ahead of the Federal Open Market Committee (FOMC) regular meeting scheduled for January 31 to February 1. The announcement of a large-scale restructuring by Alphabet, the fourth-largest company by market capitalization, acted as a positive catalyst for the market. Alphabet CEO Sundar Pichai stated in a letter to employees that the company would reduce its workforce by 12,000.

With recent data confirming easing inflation, market expectations are growing that the Fed will raise the benchmark interest rate by 0.25 percentage points at the February FOMC meeting. Fed Governor Christopher Waller supported slowing the pace of rate hikes at an event held by the Council on Foreign Relations (CFR) in New York. Waller said, "Based on current data, there does not seem to be much turbulence," and expressed a preference for a 0.25 percentage point increase. He added that a mild recession would not be too bad. Patrick Harker, President of the Philadelphia Federal Reserve Bank and a voting member of this year’s FOMC, also mentioned that a 0.25 percentage point rate hike would be appropriate.

In the New York bond market, U.S. Treasury yields rose. The 10-year yield climbed to around 3.47%. At one point during the session, it surpassed 4.7%. The 2-year yield, which is sensitive to monetary policy, also exceeded 4.2% before slightly narrowing its gains. The bond market continues to see an inverted yield curve where long-term yields fall below short-term yields, a phenomenon typically regarded as a recession indicator.

Housing data released on the day also showed weakness, reinforcing recession concerns. The National Association of Realtors (NAR) reported that December existing home sales (seasonally adjusted) fell 1.5% from the previous month, marking the lowest level since 2010 and the 11th consecutive month of decline. The median price of existing homes sold last month also dropped for the sixth consecutive month to $366,900.

International oil prices continued to rise amid optimism about demand from China. On the New York Mercantile Exchange, West Texas Intermediate (WTI) crude oil for February delivery closed at $81.31 per barrel, up 98 cents (1.22%) from the previous session. On a weekly basis, oil prices rose 1.82% this week, marking a second consecutive week of gains.