Wall Street closes with strong gains to start the last quarter

Wall Street closes with strong gains to start the last quarter
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  • Tesla falls as third-quarter deliveries fall short of market estimates
  • US factory activity slowest in ~2.5 years in September: ISM
  • Credit Suisse and Citi cut 2022 year-end target for the S&P 500
  • Indices up: Dow 2.66%, S&P 500 2.59%, Nasdaq 2.27%

Oct 3 (Reuters) – All three major Wall Street indexes rose to close above 2% on Monday as U.S. Treasury yields fell on weaker-than-expected manufacturing data, adding to the appeal. of the shares at the beginning of the last quarter of the year.

The US stock market has suffered three consecutive quarterly declines in a tumultuous year marked by interest rate hikes to control historically high inflation and concerns about a slowing economy.

“US yield markets (are) pulling back, that’s been a positive… and that connotes a more risky environment,” said Art Hogan, chief market strategist at B. Riley Wealth in Boston.

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Further supporting rate-sensitive growth stocks, the benchmark 10-year US Treasury yield fell after British Prime Minister Liz Truss was forced to reverse course on a tax cut for the lowest rate. high.

Top 11 S&P 500 (.SPX) sectors moved into positive territory, with energy (.SPNY) being the biggest winner.

Oil major Exxon Mobil Corp. (XOM.N) and Chevron Corp rose more than 5%, following a jump in crude prices, as sources said the Organization of the Petroleum Exporting Countries and its allies are eyeing their biggest output cut since the start of the COVID-19 pandemic. 19.

Growth of Megacap and technology companies like Apple Inc. (AAPL.O) and Microsoft Corp. (MSFT.O) rose more than 3% respectively, while banks <.SPXBK> advanced 3%.

Data showed manufacturing activity rose at its slowest pace in nearly two-and-a-half years in September as new orders contracted, likely as rising interest rates to control inflation cooled demand for goods. . read more

The Institute of Management and Supply said its manufacturing PMI fell to 50.9 this month, below estimates but still above 50, indicating growth.

“The economic data stream was actually worse than expected. In a very counterintuitive way that is probably good news for equity markets,” Hogan said.

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

“(While) good economic data, strong readings have been a catalyst for selling, this is the first time we’ve seen some negative news as a catalyst.”

All three major indexes closed a volatile third quarter lower on Friday on growing fears that the Federal Reserve’s aggressive monetary policy will push the economy into recession.

The Dow Jones Industrial Average (.DJI) it rose 765.38 points, or 2.66%, to 29,490.89; the S&P 500 (.SPX) 92.81 points, or 2.59% gained, to 3,678.43; and the Nasdaq Composite (.IXIC) it added 239.82 points, or 2.27%, to 10,815.44.

Volume on US exchanges was 11.61 billion shares, compared to the 11.54 billion average for the full session over the past 20 trading days.

tesla inc. (TSLA.O) it fell 8.6% after it sold fewer vehicles than expected in the third quarter as deliveries lagged far behind production due to logistical hurdles. Group of lucid companions (LCID.O) 0.9% and Rivian Automotive (RIVN.O) fell 3.1%. read more

Major automakers are expected to report modest declines in U.S. new-vehicle sales, but analysts and investors worry that an increasingly gloomy economic outlook, not inventory shortages, will lead to weaker auto sales. read more

Citigroup and Credit Suisse became the latest brokerages to cut 2022 year-end targets for the S&P 500 as US stock markets heat up from the central bank’s aggressive moves to control inflation. read more

Credit Suisse also set a 2023 year-end price target for the benchmark at 4,050 points, adding that 2023 would be a “year of weak growth, not recession, and falling inflation.”

Advancing issues outnumbered declines on the New York Stock Exchange by a ratio of 5.04 to 1; on Nasdaq, a ratio of 2.70 to 1 favored advancers.

The S&P 500 posted a new 52-week high and 23 new lows; the Nasdaq Composite recorded 58 new highs and 282 new lows.

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Reporting from Echo Wang in New York; Additional reporting from Ankika Biswas and Bansari Mayur Kamdar in Bengaluru; Edited by Anil D’Silva, Arun Koyyur, and Richard Chang

Our standards: The Thomson Reuters Trust Principles.

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