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Stocks recover losses after hot inflation print

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US stocks recovered from earlier losses on Thursday to end the session mostly flat after a new December inflation reading came in slightly hotter than economists had expected, raising new questions about the Federal Reserve's path on interest rates.

The S&P 500 (^GSPC), which fell 0.8% during the session, closed just below the flat line. The Dow Jones Industrial Average (^DJI) and Nasdaq Composite Index (^IXIC) are hovering slightly above breakeven.

Interest rate-sensitive sectors lagged the most, with real estate and utility stocks ending the session lower.

Stocks struggled this week as investors counted down to the US consumer inflation reading for December. This reading showed a slightly larger jump than expected, as prices rose by 0.3% on a monthly basis and 3.4% on an annual basis. On a “core” basis, which excludes volatile food and energy categories, inflation rose 3.9% over the past year.

This reading was considered crucial for traders who have been increasingly calculating the odds of a “soft landing” – where inflation falls to 2% without an economic contraction – since the last CPI report.

Meanwhile, US Bitcoin ETFs (full list here) began trading on Thursday after the Securities and Exchange Commission gave regulatory approval on Wednesday.

Bitcoin (BTC-USD) held more than $46,000 per token, while rival ethereum (ETH-USD) jumped amid bets that the second-largest token is next to get the ETF's green light.

Ahead of its quarterly financial update on Friday, Citigroup (C) said it would take more than $3 billion in reserves and one-time expenses into the results. Q4 earnings season is crucial for stocks, given their poor performance so far this year.

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  • Stocks recover losses after hotter-than-expected CPI reading

    US stocks recovered losses on Thursday to end the session flat after a new December inflation reading came in slightly hotter than expected, raising new questions about the Federal Reserve's path on interest rates.

    The S&P 500 (^GSPC) closed down just 3 points after rising toward a new high in the previous session. The Dow Jones Industrial Average (^DJI) rose 15 points, and the Nasdaq (^IXIC) closed flat.

    Interest rate sensitive sectors such as real estate and utilities lagged during Thursday's session. Technology has made its way into the green zone. Energy stocks also ended slightly higher.

    Cryptocurrency-related stocks fell in afternoon trading, reversing earlier gains on the first day of trading for 11 spot exchange-traded funds (ETFs).

  • Hertz puts 20,000 electric cars on sale, leading to a decline in inventory

    Hertz (HTZ) stock fell as much as 4% on Thursday after the car rental company said it had begun selling about 20,000 electric vehicles, or about a third of its electric vehicle fleet.

    Proceeds from the sale will go toward purchasing gas-powered vehicles “to meet customer demand.”

    The company said part of the reason it is shifting away from electric vehicles has to do with maintenance costs.

    Hertz He said, “Collision and damage-related expenses, primarily associated with electric vehicles, remained elevated” in the fourth quarter.

    Hertz also said it expects approximately $245 million in depreciation expenses for the fourth quarter of 2023 stemming from electric vehicle sales.

    The company had plans to electrify its rental car fleet by ordering 100,000 Tesla (TSLA) Model 3 sedans by 2022, and 65,000 Polestar (PSNY) vehicles over five years.

    Hertz said Thursday that it will implement a series of initiatives to improve the profitability of its remaining fleet of electric vehicles.

  • Oil trims its gains but stabilizes higher amid tensions in the Middle East

    Oil futures closed at session highs on Thursday.

    West Texas Intermediate (CL=F), ​​which advanced more than 3%, was up about 1% at $72.02 a barrel. Brent crude futures (BZ=F) lost most of their previous gains to close slightly higher at $77.04 per barrel.

    Prices rose on Thursday after Iran said it had seized a tanker carrying Iraqi oil In retaliation for the confiscation of the same ship By the United States last year. The incident raised fears of escalating tensions in the Middle East.

    Meanwhile, US electricity and gasoline costs rose last month, contributing to higher-than-expected inflation for December.

    “The energy index rose 0.4% during the month, as increases in the electricity index and gasoline index offset declines in the natural gas index,” the Bureau of Labor Statistics (BLS) said in its statement.

    Electricity prices increased by 1.3% compared to the previous month. The gasoline index rose 0.2% in December after falling 6% in November. However, the BLS noted that before seasonal adjustment, gasoline prices actually fell 5.8% last month.

  • Housing costs remain a large contributor to the recent rise in the CPI, but experts point to hopeful signs

    Housing costs again had a major impact on last month's hotter-than-expected inflation reading. But as Yahoo Finance's Danny Romero highlights, some experts are pointing to hopeful signs in the latest data.

    The shelter component of the Consumer Price Index (CPI) rose 0.5% in December from the previous month, compared to a monthly gain of 0.4% in November.

    On an annual basis, housing inflation remained high, rising by 6.2% compared to last year.

    Optimistic take? This is lower than November's figure of 6.5% year over year and March's peak of 8.2%.

    Read more here.

  • Cryptocurrency stocks reflect gains amid spot Bitcoin ETF trading

    Cryptocurrency-related stocks fell in afternoon trading, reversing earlier gains on the first day of trading for 11 spot exchange-traded funds (ETFs).

    Marathon Digital (MARA), the third most popular index on Yahoo Finance, was down 14% Thursday afternoon, despite opening the session in the green. Shares of Riot Platforms (RIOT) fell as much as 16%.

    Coinbase (COIN) stock, a top-five indicator on Yahoo Finance, fell more than 5%. Earlier in the session, shares rose more than 5%.

    The recently approved ETFs, which readers can track here, allow investors to gain exposure to Bitcoin (BTC-US) without having to own it.

    Bitcoin rose to $48,000 on Thursday morning, before falling to just over $46,000 by midday.

  • Microsoft briefly overtook Apple as the world's most valuable company

    Microsoft (MSFT) briefly overtook Apple's (AAPL) market cap during Thursday's session, making it the most valuable publicly traded company in the world.

    As Yahoo Finance's Dan Hawley points out, the software giant took the top spot immediately after trading, with a valuation of $2.8 trillion.

    Apple's market cap was traded at more than $2.8 trillion, but it was just behind Microsoft. Apple shares struggled in the first two weeks of the year, with analysts from three banks downgrading the company's shares amid concerns about slowing iPhone demand.

    Read more here.

  • Stocks are red in the afternoon

    Shares were down around 12:45 PM ET on Thursday.

    The S&P 500 (^GSPC) fell about 0.8% after the index ended Wednesday at its highest close since January 2022, just short of setting a new record. The Dow Jones Industrial Average (^DJI) fell 0.6% and the Nasdaq (^IXIC) led the losses, falling nearly 0.9%.

    Some interest rate-sensitive sectors such as real estate and financials, which performed well in the recent market rally, fell by about 1%. Utilities led the losses, falling more than 2%.

    Source: Yahoo FinanceSource: Yahoo Finance

    Source: Yahoo Finance

  • Oil rises as tensions rise in the Middle East

    Oil futures rose on Thursday after Iran seized an oil tanker in the Gulf of Oman, raising fears of escalating tensions between the United States and Tehran.

    WTI (CL=F) advanced more than 3% during the morning session. Brent crude futures (BZ=F) also rose more than 2.5%, trading above $78 per barrel.

    The Iranian army seized the tanker carrying Iraqi oil In retaliation for the confiscation of the same ship By the United States last year, according to Iranian state media.

    “The geopolitical escalation in the Red Sea region has once again reflected the bearish bias of futures,” Dennis Kessler, senior vice president at BOK Financial, said on Thursday.

    Thursday's price action marked a change in trend from the previous session when futures fell more than 1% following the release of weekly storage data. The Energy Information Administration said that US crude inventories increased by 1.34 million barrels last week.

  • Bitcoin ETFs begin trading

    The long-awaited trading of spot Bitcoin ETFs is underway.

    A curated list on Yahoo Finance tracks all the action on ETFs. Among the newly released ETFs, BlackRock's iShares Bitcoin ETF (IBIT) is seeing the most volume in morning trading.

    Bitcoin (BTC-USD) traded at around $46,700 amid ETF action.

    Below are details of the various fees associated with each ETF.

  • Hotter-than-expected inflation doesn't change Fed rate cut bets

    December's inflation report came in a little hotter than Wall Street expected, but it did not move investors' bets that the Fed's first interest rate cut could come in March.

    As of early Thursday morning, markets were anticipating a roughly 67% chance that the Fed would cut interest rates in March. According to CME FedWatchlargely unchanged from the previous day's odds.

    “I don’t think postponing the cuts is enough,” Stephen Juneau, US economist at Bank of America, told Yahoo Finance Live. “We're looking for a marching cut to start the cutting cycle. That kind of keeps the door open. It certainly doesn't close the door.”

  • Stocks gain despite hotter-than-expected inflation print

    US stocks rose on Thursday morning despite a new December inflation reading that came in slightly hotter than economists had expected, raising new questions about the Federal Reserve's path on interest rates.

    The S&P 500 (^GSPC) added about 0.2% after the benchmark index ended Wednesday at its highest close since January 2022, just short of setting a new record. The Dow Jones Industrial Average (^DJI) rose 0.1%, while the tech-stock-laden Nasdaq led the way, up 0.3%.

  • Inflation rates are higher than expected in December

    Thursday's inflation report showed that consumer prices rose slightly more than expected in November.

    A quick look at the numbers:

    • Core CPI, month-on-month: 0.3% increase vs. 0.2% expected

    • Core Consumer Price Index, YoY: 3.4% vs. 3.2% expected

    • “Core” CPI on an annual basis: 3.9% vs. 3.8% expected

    Yahoo Finance's Josh Schaeffer has all the details here.

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