Growth stocks pull Wall Street out of slowdown worries

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., June 22, 2022. REUTERS/Brendan McDermid/File Photo

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  • China lowers key rates as economic data disappoints
  • Energy drops as oil falls on demand worries
  • Yields fall on renewed concerns over global slowdown
  • Indices up: Dow 0.33%, S&P 0.20%, Nasdaq 0.33%

Aug 15 (Reuters) – Wall Street’s major indexes gained in choppy midday trading on Monday as a jump in growth in megacaps and tech stocks fueled a rally after early losses on worries related to the slowdown after weak economic data from China.

As US Treasury yields retreated, high-growth companies, whose valuations are sensitive to rising bond yields, rose. Tesla (TSLA.O) added 3%, while Alphabet (GOOGL.O) and Microsoft Corp (MSFT.O) gained 0.3% each, lifting the Nasdaq (.IXIC).

“We remain mostly in a teflon market where bad news is ignored,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

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China’s central bank cut key rates in a surprise move to boost demand after the economy unexpectedly slowed in July as Beijing’s zero-COVID policy and a real estate crisis weighed on factory activity and retail. Read more

U.S.-listed shares of Chinese e-commerce giant Alibaba Group Holding Ltd fell 0.6%, while those of internet company Baidu Inc fell 0.8%.

Energy stocks (.SPNY) traded down 1.9% as crude prices fell on demand concerns in China, the world’s largest oil importer.

Exxon Mobil Corp (XOM.N), Chevron Corp (CVX.N), Halliburton Co (HAL.N) and Marathon Oil Corp (MRO.N) all fell between 1.9% and 3.3%.

As of 12:21 p.m. ET, the Dow Jones Industrial Average (.DJI) was up 111.71 points, or 0.33%, at 33,872.76, the S&P 500 (.SPX) was up 8.41 points, or 0.20%, to 4,288.56, and the Nasdaq Composite (.IXIC) gained 43.50 points, or 0.33%, to 13,090.68.

Investors were bullish after a recent batch of data raised hopes the Federal Reserve could pull off a soft landing for the economy, helping the S&P 500 recoup half of its losses this year over the past few months. last weeks.

“Expectations remain that at least for those in the bull camp, we’ve seen peak inflation, the Fed won’t be raising rates as aggressively once we get past September and in more than six months the economy going to be on a much better footing,” said James of Wedbush.

Late last week, the benchmark and the Nasdaq posted their fourth straight week of gains even as Fed officials pushed back on expectations of an earlier-than-expected end to rate hikes and economists have warned that inflation could return in the coming months.

Of the 456 S&P 500 companies that reported earnings on Friday, 77.6% beat expectations, according to Refinitiv data.

Investors brace for quarterly reports from major retailers this week, with comments from Walmart Inc (WMT.N) and Target Corp (TGT.N) likely to set the tone for the sector as it faces the brunt of weak demand . Read more

Nexstar Media Group (NXST.O), the largest owner of local TV stations in the United States, fell 1.3% after saying it would acquire a controlling stake in the CW network, home to popular shows such as “Riverdale” and the superhero show “The Shine”. Read more

Falling issues outnumbered advances by a 1.12-to-1 ratio on the NYSE. Advancing issues outnumbered declining issues with a 1.10-to-1 ratio on the Nasdaq.

The S&P index recorded five new 52-week highs and 29 new lows, while the Nasdaq recorded 54 new highs and 24 new lows.

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Reporting by Bansari Mayur Kamdar, Susan Mathew and Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta and Arun Koyyur

Our standards: The Thomson Reuters Trust Principles.

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