Growth stocks lead the rebound on Wall Street after a sharp sell-off

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., September 26, 2022. REUTERS/Brendan McDermid

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  • Major clues set to break five-day losing streak
  • Rate-Sensitive Tech, Growth Stocks Shine
  • Strong rebound in oil prices boosts energy companies
  • Indices up: Dow 0.39%, S&P 0.58%, Nasdaq 0.96%

Sep 27 (Reuters) – Wall Street’s major indexes rose for the first time in six sessions on Tuesday, with megacap growth stocks doing most of the heavy lifting following a sharp sell-off on fears of a slowdown economy induced by a rate hike.

Rate-sensitive stocks including Amazon.com Inc, Apple Inc, Microsoft Corp, Meta Platforms Inc (META.O) and Tesla Inc (TSLA.O) rose between 0.4% and 3.2%.

The technology (.SPLRCT), communication services (.SPLRCL) and consumer discretionary (.SPLRCD) sectors led the gain with gains of around 1% each.

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“We could see a near-term bottom,” said Jason Pride, chief investment officer for private wealth at Glenmede, adding that some technical indicators were still showing strong negative sentiment, suggesting the market is a bit oversold.

“But this low could be more of a bearish rally similar to the one experienced earlier this summer.”

As of 10:10 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 114.32 points, or 0.39%, at 29,375.13, the S&P 500 (.SPX) was up 21 .07 points, or 0.58%, to 3,676.11, and the Nasdaq Composite (.IXIC) rose 103.40 points, or 0.96%, to 10,906.32.

However, early gains showed signs of running out of steam after US Federal Reserve officials reminded investors that the central bank’s priority was to control domestic inflation, St. Louis Fed President, James Bullard, arguing for further rate hikes in future meetings.

Chicago Fed President Charles Evans said earlier today that the central bank will need to raise interest rates by at least another percentage point this year. Read more

US stocks started the week on a weak base after the Dow Jones Industrial Average (.DJI), in the previous session, confirmed that it had been in a bear market since early January, while the benchmark index S&P 500 (.SPX) gave up the last of its gains made during a summer rally.

Concerns about corporate earnings under pressure from soaring prices, an economic slowdown and higher interest rates have rattled Wall Street over the past two weeks.

Analysts have cut their S&P 500 earnings estimates for the third and fourth quarters, and for all of 2022. For the third quarter, S&P 500 earnings are expected to rise just 4.6% year over year. the other, compared to the 11.1% growth expected in early July. Read more

Wells Fargo analysts now see the U.S. central bank raising its target range for the federal funds rate to 4.75%-5.00% by the first quarter of 2023. Read more

Oil stocks received a boost after a strong rally in crude prices, with the energy sector S&P 500 (.SPNY) up 1.42%.

Moderna Inc (MRNA.O) gained 2% after the U.S. Food and Drug Administration on Monday authorized five additional batches of the vaccine maker’s updated COVID-19 booster shots performed at Catalent’s facilities in the United States. ‘Indiana. Read more

Advancing issues outnumbered decliners for a 2.40-to-1 ratio on the NYSE and a 2.61-to-1 ratio on the Nasdaq.

The S&P index recorded no new 52-week highs and 15 new lows, while the Nasdaq recorded 21 new highs and 93 new lows.

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Reporting by Ankika Biswas, Shreyashi Sanyal and Susan Mathew in Bengaluru; Editing by Anil D’Silva and Shounak Dasgupta

Our standards: The Thomson Reuters Trust Principles.

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