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Stock market news for January 3, 2022

A higher close for the US stock market on the first trading session of 2022. All major stock indexes closed higher, small-cap stocks outperformed. How did the US stock market close today? Here are the closing numbers.

S&P 500: 4,796.56,+30.38(+0.64%)
Dow 30: 36,585.06,+246.76(+0.68%)
Russell 2000: 2,272.56,+27.24(+1.21%)

Stock market news today

“U.S. stocks hovered near record highs on Monday, as investors built on momentum from last week into at least the first session of the new year. The S&P 500, Dow and Nasdaq each advanced.

U.S. equities posted another year of solid gains in 2021, rising by 27% and delivering a rare third consecutive double-digit annual percentage increase. Within the S&P 500, the energy and real estate sectors outperformed, gaining more than 42% each during the year for these sectors’ best annual gains on record.

Still, the blue-chip index’s robust overall rise was powered on a stock-by-stock basis by just a handful of mega-cap names. According to Goldman Sachs analyst David Kostin, the five largest components of the S&P 500 (or Facebook, Apple, Amazon, Microsoft, Google) together returned 37% last year – and now constitute about 23% of the entire index.

“In 2022, variables associated with earnings and valuation will determine the performance of the S&P 500 index and its underlying constituents,” Kostin wrote in a note Monday. He expects the index to rise another about 7% to end 2022 at 5,100, with his outlook one among several Wall Street predictions calling for a gain to more than 5,000 for the S&P 500 this year.

“From an earnings perspective, decelerating economic growth will limit sales gains for many companies. Consequently, stock return dispersion will be most evident when viewed through the margin channel,” Kostin added. “Stocks with high labor cost ratios and exposure to wage inflation will likely underperform.”

But for the S&P 500 as a whole, a 27% rise and 29% total return this past year bodes favorably for the coming period. In the 71 years spanning back to 1950, when the S&P 500 posted a total return of 25% or more in a year, stocks rose 82% of the time the next year, according to data from Truist Advisory Services co-chief investment officer Keith Lerner. However, the magnitude of returns could moderate.”

Stock market data: Yahoo Finance

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