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Stocks surge 2.5% after BoJ move, still down big for the month

Jan. 29, 2016 4:30 PM ETBy: Carl Surran, SA News Editor23 Comments
  • Stocks soared and ended at their highs of the day, following Japan's surprise interest rate cut and a better than expected showing in January's Chicago PMI data.
  • "There’s a significant surprise factor: almost no economist was calling for this,” Alex Dryden, global market strategist at J.P. Morgan Asset Management, said of the BoJ action.
  • Traders also cited the effects of monthly fund rebalances; due to the divergence in stock and bond performance in January, funds with a mandate to maintain a certain balance between the two asset classes were being forced to buy stocks today, they said.
  • Technology (+3.6%) outperformed the other sectors, as materials (+2.9%) and industrials (+2.8%) followed.
  • Despite today's gains, the main indexes ended January with steep monthly losses of 5%-8%; for the week, the S&P 500 added 1.7% and the Dow jumped 2.3%, but the Nasdaq finished the week little changed.
  • Today's trading volume was relatively heavy, with more than 1.6B shares changing hands at the NYSE floor.
  • U.S. crude oil futures settled 1.2% higher at $33.62/bbl, for its first four-day win streak since April.
  • Treasury prices rallied, pushing yields lower; the 10-year yield fell by 5 bps at 1.93%, capping a drop of 34 bps over the month in the biggest monthly loss in a year.

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