Stock rally recovers nearly all this year’s losses even as Boeing slides

Wall Street rallied Monday to claw back almost all the losses from its slow start to the year.

The Standard & Poor’s 500 jumped 1.4% to pull within 0.7% of its all-time high set two years ago. It’s a return of momentum for Wall Street’s main measure of health, which was coming off its first losing week in the last 10.

The Nasdaq composite shot 2.2% higher for its best day in eight weeks, and the Dow Jones industrial average lagged the market with a more modest gain of 0.6%.

Boeing dragged on the Dow in its first trading after one of its jetliners suffered an in-flight blowout over Oregon. It fell 8%. Spirit Aerosystems, which builds fuselages and other parts for Boeing, lost 11.1%.

Stocks of oil-and-gas companies were also heavy weights after Saudi Arabia gave indications of potentially weak demand for crude. Exxon Mobil fell 1.7%, and Marathon Oil lost 2.7% as a barrel of U.S. crude tumbled $3.04 to $70.77.

But the rest of Wall Street largely climbed as easing Treasury yields relaxed the pressure on the stock market.

All told, the S&P 500 rose 66.30 points to 4,763.54. The Dow gained 216.90 points to close at 37,683.01, and the Nasdaq jumped 319.70 points to 14,843.77.

Big Tech stocks led the way. They were the main reason for Wall Street’s big gains last year, when excitement around artificial-intelligence technology made just a handful responsible for most of the S&P 500’s returns. But they stumbled last week as markets broadly regressed.

Nvidia rose 6.4% after announcing several AI-related products. Apple, meanwhile, rose 2.4% to bounce back from its worst week since September. They were the strongest forces lifting the S&P 500, along with Microsoft, Amazon and Alphabet.

Commercial Metals jumped 7.5% after reporting stronger profit for the latest quarter than analysts expected. It said construction activity is healthy in North America, driving demand for steel and helping to offset weaker conditions in Europe.

More earnings results will be arriving at the end of the week, with Delta Air Lines, JPMorgan Chase and UnitedHealth Group on Friday among those kicking off the S&P 500’s reporting season for the final three months of 2023.

The highlight of the week may be Thursday’s release of the latest inflation data for U.S. consumers. A cooldown there has helped ignite tremendous hope on Wall Street that the Federal Reserve will soon see enough improvement to not just halt its interest rate increases but begin cutting them.

The Fed has already raised its main interest rate to the highest level since 2001 in hopes of conquering high inflation. The Fed last month said it’s seen improvement, and Wall Street’s expectation is for it start cutting rates as soon as March.

Treasury yields have already sunk in the bond market on such expectations, and they edged lower Monday. The yield on the 10-year Treasury fell to 4.01% from 4.05% late Friday. It was above 5% during October, at its highest point since 2007 and putting sharp downward pressure on the stock market.

The resulting rally for stocks carried the S&P 500 near its all-time high. But that strength has also caused some on Wall Street to say that at least a pause for stocks is likely in the near term. The market looks “extremely expensive,” said Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management.

Critics also warn that traders on Wall Street may be too optimistic about how much the Federal Reserve may cut rates this year. The Fed has indicated three cuts may arrive in 2024, but traders have made moves in anticipation of roughly double that. Such a high number may not be likely unless a recession arrives to force the Fed’s hand, critics say.

That’s why much focus is on corporate profits, where growth could help prop up stock prices.

Analysts expect companies in the S&P 500 to report growth of 1.3% in earnings per share for the fourth quarter of 2023 from a year earlier, according to FactSet. Although that’s a relatively meager number, it would mark just a second straight quarter of growth.

The economy has so far remained resilient despite worries last year about a looming recession. That has helped protect revenue for companies. But their costs have also climbed with inflation still high across the economy, squeezing their profits.

Helen of Troy — the consumer products company behind such brands as Hydro Flask, Osprey and Drybar — rose 4.5% after reporting stronger-than-expected profit for its latest fiscal quarter. Incoming Chief Executive Noel Geoffroy said the company did better than it had expected despite “what continues to be a challenging macro consumer environment.”

Elsewhere on Wall Street, the fallout from the weekend’s blowout of a Boeing jetliner flown by Alaska Airlines waned through the day. Alaska Air Group ended just 0.2% lower after falling sharply earlier. United Airlines, which flies the same Boeing model and also had to cancel flights due to its grounding, opened lower but finished with a gain of 2.8%.

Stock markets overseas were mixed.

Hong Kong’s Hang Seng sank 1.9%, led by losses for property and technology shares, while stocks fell 1.4% in Shanghai.

Property shares tumbled after Zhongzhi Enterprise Group, a major lender to real estate developers, filed for bankruptcy in Beijing. China also announced sanctions Sunday against five American defense-related companies in response to U.S. arms sales to Taiwan and U.S. sanctions on Chinese companies and people.

The announcement came ahead of an election in Taiwan that is centered on the self-ruled island’s relationship with China, which claims it as its own territory.