US STOCKS-Wall Street ends sharply higher, fueled by Apple

A positive first-quarter earnings season has been overshadowed by worries about the conflict in Ukraine, soaring inflation, COVID-19 lockdowns in China and aggressive policy tightening by central banks. The S&P 500 is down about 14% so far in 2022, and the Nasdaq is off around 24%, hit by tumbling growth stocks.


Reuters | Updated: 18-05-2022 01:31 IST | Created: 18-05-2022 01:31 IST
US STOCKS-Wall Street ends sharply higher, fueled by Apple

Wall Street finished sharply higher on Tuesday, lifted by Apple, Tesla and other megacap growth stocks after strong retail sales in April eased worries about slowing economic growth. Ten of the 11 major S&P sector indexes advanced, with financials, materials and technology among the top performers.

Investors were cheered by data showing U.S. retail sales increased 0.9% in April as consumers bought motor vehicles amid an improvement in supply and frequented restaurants. Recently punished shares of Microsoft Corp, Apple Inc, Tesla Inc and Amazon drove the S&P 500 and the Nasdaq higher.

Tuesday's broad rally followed weeks of selling on the U.S. stock market that last week saw the S&P 500 sink to its lowest level since March 2021. "The largest pockets of stocks that investors tend to buy have been essentially beaten up. They're either in correction or bear market territory," said Sylvia Jablonski, chief investment officer of Defiance ETF. "I think investors are looking at these opportunities to buy on the dip, and I suspect that today is a good day to do that."

The S&P 500 Banks index jumped, with Citigroup climbing after Warren Buffett's Berkshire Hathaway disclosed a nearly $3 billion investment in the U.S. lender. Another set of economic data showed industrial production accelerated 1.1% last month, higher than estimates of 0.5%, and faster than a 0.9% advance in March.

"This is consistent with continued economic growth in the second quarter and not a recession underway," said Bill Adams, chief economist for Comerica Bank in Dallas. The U.S. Federal Reserve will "keep pushing" to tighten U.S. monetary policy until it is clear inflation is declining, Fed Chair Jerome Powell said at an event on Tuesday.

Traders are pricing in an 85% chance of a 50-basis point rate hike in June. According to preliminary data, the S&P 500 gained 81.54 points, or 2.03%, to end at 4,089.55 points, while the Nasdaq Composite gained 323.23 points, or 2.77%, to 11,986.02. The Dow Jones Industrial Average rose 432.62 points, or 1.35%, to 32,659.17.

Walmart Inc tumbled after the retail giant cut its annual profit forecast, signaling a bigger hit to margins. Retailers Costco, Target and Dollar Tree also fell.

United Airlines Holdings Inc gained after the carrier lifted its current-quarter revenue forecast, boosting shares of Delta Air, American Airlines and Spirit Airlines. A positive first-quarter earnings season has been overshadowed by worries about the conflict in Ukraine, soaring inflation, COVID-19 lockdowns in China and aggressive policy tightening by central banks.

The S&P 500 is down about 14% so far in 2022, and the Nasdaq is off around 24%, hit by tumbling growth stocks. U.S.-listed Chinese stocks jumped on hopes that China will ease its crackdown on the technology sector.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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