Stocks finished higher Monday as investors looked beyond last week's dismal results and turned to Tuesday's consumer inflation report for January.
The Dow Jones Industrial Average surged 376 points, or 1.11%, to 34,245, while the S&P 500 gained 1.14% and the tech-focused Nasdaq advanced 1.48%.
Economists will be watching January's consumer price index, which the Bureau of Labor Statistics is scheduled to release on Tuesday.
“The initial move to start the week is higher, but traders might struggle to remain excessively bulllish before tomorrow’s inflation data,” said Edward Moya, senior market analyst for the Americas with Oanda.
“Pricing pressures are expected to rise last month and we should not be surprised if the Valentine's day inflation report is very hot as used car prices and energy costs clearly rebounded last month," Moya said.
Federal Reserve Chairman Jerome Powell said on Feb. 7 that he expected to see 'significant' declines in inflation this year, adding that he was pleased to see disinflation taking root without damaging the domestic job market.
"The reality is if we continue to get strong labor market reports or higher inflation reports, it might be the case that we have to raise rates more" than is now expected," Powell said.
The Fed chief added that it would likely take a year to bring headline inflation back to the Fed's 2% target -- a target he said would remain firmly in place -- given what he described as "structural" shortages in the labor market.
Stocks finished mixed on Friday and posted the worst week so far this year. The S&P 500 finished down 1.1% for the week, the Dow Jones Industrial 0.2%, and the Nasdaq Composite 2.4%.
Shares of Facebook parent Meta (META) rose 3% after the Financial Times reported the social media giant was planning a fresh round of layoffs.
Meta, which let go of 11,000 employees in November, is likely to announce the restructuring after it has completed staff performance reviews sometime in March.
Meta has delayed finalizing multiple teams’ budgets while it prepares a fresh round of job cuts as CEO Mark Zuckerberg’s plan to contain costs in his “year of efficiency” causes disruption at the social media company, the Financial Times said.
Salesforce (CRM) finished up 2.45% after BofA Securities analyst Brad Sills raised his price target on the world's biggest enterprise software company to $200 from $180 per share, telling investors that it is emerging as a "quality" Growth at a Reasonable Price (GARP) stock.
Last week, Dan Loeb's Third Point Hedge fund became the fifth activist investor to take a stake in the company.
Shares of Sorrento Therapeutics (SRNE) tumbled 72.6% after the biopharmaceutical company filed for bankruptcy in the Southern District of Texas.
The company, which received a $34 million government contract to develop a coronavirus protection and/or treatment in 2020, was once targeted by short-seller Hindenburg Research, which charged the Sorrento's actions “simply amount to an attempt to shamelessly profiteer off the pandemic.”
The New York Department of Financial Services ordered Paxos Trust Co., which issues and lists Binance’s dollar-pegged cryptocurrency, to stop creating more of its BUSD token, Binance said in a statement.
"Paxos continues to maintain strong regulatory capital to protect customers, as well as a strong corporate balance sheet to support our long-term business goals," the company said. "This action does not impact our ability to continue serving new or existing customers, our continued dedication to grow our staff or fund our business objectives.”
Earnings reports are expected this week from Airbnb (ABNB), Coca-Cola (KO), DraftKings (DKNG), Paramount Global (PARA), and Deere (DE), among many others.
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