NEW YORK: The Nasdaq index moved higher in early session on Monday as beaten-down growth stocks tried to stage a comeback from a steep selloff that was triggered by worries of a central bank-induced recession.
The benchmark S&P 500 index also showed signs of steadying after briefly falling below its mid-June closing low of 3,666 on Friday that almost erased a sharp summer rebound.
Hints from the US Federal Reserve that high interest rates could last through 2023 sent the three major stock indexes tumbling between 4% and 5% last week, with the Dow Jones index coming within spitting distance of a bear market in the previous session.
Sectors housing megacap growth companies, including technology, consumer discretionary and communication services, led the gains.
Apple Inc, Microsoft Corp, Amazon.com Inc and Tesla Inc rose between 0.9% and 2.0%, boosting the Nasdaq index.
“You’re just seeing a relief rally after a very tough stretch of performance for the Nasdaq and growth stocks,” said Jeffrey Schulze, investment strategist at ClearBridge Investments.
“You have obviously seen a lot of pain in the growth areas of the market over the course of the last month as investors reprice higher Fed funds rates and ultimately a terminal rate or this hiking cycle.” Shares of casino operators Wynn Resorts, Las Vegas Sands Corp and Melco Resorts & Entertainment jumped between 11.6% and 30.4% after Macau planned to open to mainland Chinese tour groups in November for the first time in almost three years.
At 10:09 a.m. ET the Dow Jones Industrial Average was down 119.29 points, or 0.40%, at 29,471.12, the S&P 500 was up 3.43 points, or 0.09%, at 3,696.66 and the Nasdaq Composite was up 103.91 points, or 0.96%, at 10,971.84.
Defensive parts of the market, including sectors such as the S&P 500 utilities and real estate, fell more than 1% each, suggesting a risk-on move.
Trading sentiment earlier in the day was dictated by dramatic moves in the global forex market as the sterling briefly touched an all-time low on worries that the new British government’s fiscal plan threatened to stretch the country’s finances to their limits.
The CBOE Volatility index, also commonly known as Wall Street’s fear gauge, hovered near three month highs.
Declining issues outnumbered advancers for a 1.29-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.67-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week high and 37 new lows, while the Nasdaq recorded nine new highs and 183 new lows.