Stocks Higher to Pare Early-Year Losses

U.S. equities are solidly higher in afternoon action, paring some of the losses that have plagued the start of 2023. Treasury yields continue to drop, and the U.S. dollar is giving back some of yesterday's rally, but off the worst levels of the day. Crude oil prices are extending a decline and gold is trading to the upside. Equity news remains sparse, with Dow member Salesforce announcing plans to cut its workforce by about 10%, while Alibaba is rallying on signs China may be easing its clampdown on the tech sector. The economic calendar offered some lackluster data points, as manufacturing activity remained in contraction territory for the second-straight month, and mortgage applications fell for a second-consecutive week as interest rates jumped, while job openings came in above forecasts. However, the headlining event will come in afternoon action, courtesy of the Fed's minutes from its December monetary policy meeting, where it continued to aggressively tighten policy though at a decelerated pace. Asia finished mixed, and Europe added to yesterday's solid start to 2023.

At 12:50 p.m. ET, the Dow Jones Industrial Average is up 0.7%, while the S&P 500 Index and the Nasdaq Composite are gaining 1.2%. WTI crude oil is dropping $3.12 to $73.81 per barrel, and Brent crude oil is falling $3.26 at $78.84 per barrel. The gold spot price is trading $15.80 higher to $1,861.90 per ounce, and the Dollar Index is decreasing 0.4% to 104.14.

Dow member Salesforce Inc. (CRM $140) announced that it plans to cut its workforce by approximately 10% as part of its restructuring program aimed at reducing operating costs, improving operating margins, and continuing to advance its ongoing commitment to profitable growth. CRM also said its plan includes select real estate exits and office space reductions within certain markets. Shares are trading higher.

Alibaba Group Holding Ltd. (BABA $103) is rallying amid signs that Chinese regulators may be easing their clampdown on the tech sector in the country. Regulators approved Ant Group Co's fundraising plan which could potentially pave the way for a restarted initial public offering process of the financial technology firm that had been scrapped in 2020, per Bloomberg. BABA owns a stake in Ant Group.

Equity news remains in short supply as 2023 begins, and on the heels of the near 20% drop for the S&P 500 in 2022. The markets continue to wrestle with the ultimate impact of aggressive Fed actions to try to combat inflation after downshifting in December from a string of four-straight 75-basis point (bp) rate hikes to a 50-bp increase. The deceleration remained unusually aggressive, and the Fed signaled that restrictive policy will likely have to remain in place for longer and at a potentially higher "terminal rate" than expected.