The rally continues but today investors showed their continued confidence in the recovery by migrating out of growth and back to value, shooting up the Dow but down the Nasdaq.  It also helped that the WHO cited more evidence that Omicron is milder than the other variants have been.  But awaiting Wednesday’s minutes from the December Fed meeting and the expected rate hikes coming this year (and the devaluation that may cause for tech), the markets are “going to punish growth stocks with high valuations.  Defensive stocks and value stocks are likely to outperform.”  December manufacturing data showed some cooling but this was more than balanced by signs of an easing supply chain.  Volume came in at 11.6 billion. 

Tue  January 4, 2022  5:01 PM

Dow posts closing record high for 2nd day, boosted by banks

By Caroline Val etkevitch

DJ: 36,585.06  +246.76        NAS: 15,832.80  +187.83        S&P: 4,796.56  +30.38     1/3

DJ: 36,799.65  +214.59        NAS: 15,622.72  -210.08         S&P: 4,793.54  -3.02        1/4

NEW YORK, Jan 4 (Reuters) - The Dow Jones Industrial Average (.DJI)scored a record closing high on Tuesday for a second straight day as financial and industrial shares rallied, while the Nasdaq fell.  The S&P 500 (.SPX) was near flat, with declines in shares of big growth names including Tesla Inc  (TSLA.O)  weighing on the index and the Nasdaq Composite (.IXIC).  Energy (.SPNY), financials  (.SPSY) and industrials (.SPLRCI) were among sectors leading gains in the S&P 500. Helping sentiment, the World Health Organization cited increasing evidence that the coronavirus variant caused milder symptoms than previous variants. read more  The S&P 500 bank index (.SPXBK) was also up sharply.

Some strategists said financials and other value-oriented stocks could lead markets in the near term as investors gear up for interest rate hikes from the Federal Reserve by mid-year to curb high inflation. U.S. Treasury yields rose for a second trading day. read more  Investors are "going to punish growth stocks with high valuations," said Robert Phipps, a director at Per Stirling Capital Management in Austin, Texas.  "This is a time when defensive stocks and value stocks are likely to outperform."

The S&P 500 value index (.IVX) jumped, while the S&P 500 growth index (.IGX) was down. 

The Dow Jones Industrial Average (.DJI) rose 258.2 points, or 0.71%, to 36,843.26; the S&P 500 (.SPX) lost 4.74 points, or 0.10%, at 4,791.82; and the Nasdaq Composite (.IXIC) dropped 256.34 points, or 1.62%, to 15,576.46.

Tesla shares fell, a day after jumping more than 13% on stronger-than-expected quarterly deliveries.  The U.S. central bank said last month it would end its pandemic-era bond buying in 2022, signaling at least three interest rate hikes for the year. Minutes from the meeting are expected to be released on Wednesday.

Ford Motor Co (F.N)jumped after the automaker said it would nearly double annual production capacity for its red-hot F-150 Lightning electric pickup to 150,000 vehicles. read more  Earlier, U.S. manufacturing data for December showed some cooling in demand for goods, but investors took solace in signs of supply constraints easing. read more 

Advancing issues outnumbered decliners on the NYSE by a 1.16-to-1 ratio; on Nasdaq, a 1.54-to-1 ratio favored decliners.  The S&P 500 posted 70 new 52-week highs and one new low; the Nasdaq Composite recorded 98 new highs and 94 new lows.

Per the CBOE 11.6 billion shares traded hands on the U.S. exchanges.