Stocks soared at the open Tuesday after Russian President Vladimir Putin said Moscow had begun to withdraw some troops from the Ukrainian border – raising hopes that military conflict between the two countries might yet be avoided.
“Ukraine headlines continue to drive the day-to-day volatility,” says Michael Reinking, senior market strategist for the New York Stock Exchange. “As there are reports of some Russian troop withdrawal, there is an unwind of much of the movement seen across financial markets over the last few days.”
This included a big drop in energy stocks, which fell 1.1% as U.S. crude futures retreated from seven-year highs (declining 3.6% to end at $92.07 per barrel).
On the other hand, technology was the biggest gainer today – jumping 2.6% – on news that Intel (INTC, +1.8%) is buying Israeli chip manufacturer Tower Semiconductor (TSEM, +42.1%) for roughly $5.4 billion.
“While we have no incremental knowledge as to the validity of these reports, we would not be surprised to see INTC taking such a step to bolster its foundry aspirations,” says Deutsche Bank analyst Ross Seymore (Hold). “We expect to learn more about the company’s foundry strategy at its upcoming analyst meeting on Feb. 17, regardless of if Tower is part of those plans.”
Also in focus today was the latest inflation update, with the Labor Department reporting the producer price index – which measures how much suppliers are charging businesses for goods – rose a seasonally adjusted 1% month-over-month in January. On an annualized basis, producer prices surged 9.7%.
“The big picture is that inflation has gained momentum and broadened in the economy,” says Bill Adams, chief economist for Comerica Bank. “The Russia-Ukraine conflict was a factor behind January’s increase in prices; energy prices rose amid fears that the conflict would slow Russian deliveries of natural gas and oil to global markets. But prices of other goods also rose rapidly in January, as did prices of services.”
Smith adds that omicron likely played a role too, with the variant causing many Americans to be out of work because they were either sick or quarantining.
At the close, the Nasdaq Composite was up 2.5% at 14,139, the S&P 500 Index was 1.6% higher at 4,471 and the Dow Jones Industrial Average had added 1.2% to finish at 34,988.
Other news in the stock market today:
- The small-cap Russell 2000 surged 2.8% to 2,076.
- Gold futures shed 0.7% to settle at $1,856.20 an ounce, marking their first loss in eight days.
- Bitcoin caught a bid too, spiking 4.7% to $44,191.53. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
- The Intel news was a shot in the arm for the rest of the semiconductor industry, too. Nvidia (NVDA) was out in front, jumping 9.2% ahead of its fourth-quarter earnings report, which was due out after Wednesday’s close. Also making significant advances were Advanced Micro Devices (AMD, +6.3%), Micron (MU, +6.8%) and Qualcomm (QCOM, +4.8%). The relief rally was no doubt welcomed with open arms by chip-stock investors; the S&P Semiconductors Select Industry Index was off by more than 18% year-to-date heading into today’s session.
- Restaurant Brands International (QSR, +3.6%) – the Canadian parent company of Burger King, Popeyes and Tim Hortons – headed higher on the back of a strong fourth-quarter earnings report. Revenues of $1.55 billion and adjusted profits of 74 cents per share each topped analysts’ estimates. A particular point of progress were global digital sales, which popped by 67% year-over-year across 2021, to $10 billion, accounting for 30% of overall revenues.
Buffett’s Latest Buys and Sells
M&A news was likely on the mind of Buffettologists last night following the release of Berkshire Hathaway’s (BRK.B) latest holdings list.
Warren Buffett, chairman and CEO of Berkshire, unveiled his latest transactions Monday evening via a 13F filing with the Securities and Exchange Commission. While the filing showed the famed investor ended 2021 much like he started it – with lots of selling – it also revealed he made some interesting additions to the Berkshire Hathaway equity portfolio in the fourth quarter as well.
Most notably was Buffett’s new stake in Activision Blizzard (ATVI) in the final quarter of 2021. The well-timed purchase came just ahead of Microsoft’s (MSFT) late-January $68.7 billion bid for the video game maker.
But that was far from the Oracle of Omaha’s only change. All told, Uncle Warren initiated three new stakes, completely exited two positions and adjusted his exposure to eight other stocks. Read on to see Buffett’s complete list of stock buys and sells from Q4 2021.