Wall Street climbs after worst weekly sell-off in 2023 By Reuters

Written by Sruthi Shankar

(Reuters) – US stocks jumped on Monday as investors bought battered stocks after major indexes suffered their worst weekly sell-off this year on concerns about monetary tightening.

The Dow Jones Industrial Average erased its gains for the year in selling on Friday, posting a third straight week of losses on concerns that a strong US economy and high inflation will give the Federal Reserve more room to raise interest rates.

However, the mood was buoyant on Monday as US Treasury yields slumped after a strong rally, lifting interest rate-sensitive growth stocks such as Apple Inc (NASDAQ:) and Amazon.com Inc (NASDAQ::) more than 1%.

Tesla rose 4% after the electric car maker said its Brandenburg plant near Berlin was producing 4,000 vehicles a week, three weeks ahead of schedule according to the latest production plan reviewed by Reuters.

“We’re looking at a rally today because the market was down a lot last week,” said Sam Stovall, chief investment analyst at CFRA Research in New York.

“February is historically the second-worst month of the year for the stock market. So investors conclude from a seasonal perspective that stocks probably could rally at least in the near term.”

Yields on two-year notes, which are more sensitive to short-term interest rate expectations, fell after touching a four-month high earlier in the session.

Traders added to their bets from a 50 basis point rise in March after data last week showed that the personal consumption expenditures price index, the measure by which the Fed measures its 2% inflation target, rose 5.4% last month.

Fed fund futures show that traders have priced in third 25 basis point increases this year and see rates peaking at 5.39% by September.

At 9:47 a.m. ET, it was up 200.27 points, or 0.61%, at 33.017.19, the S&P 500 was up 28.03 points, or 0.71%, at 3,998.07, and it was up 104.12 points, or 0.91%, at 11,499.06. .

Data on Monday showed that new orders for US-made capital goods increased more-than-expected in January, but orders for durable goods, which are meant to last three years or more, fell more-than-expected.

After last week’s hawkish rhetoric from Fed policymakers, investors will turn to Fed Governor Philip Jefferson’s speech later in the day.

Earnings at Warren Buffett’s Berkshire Hathaway (NYSE: NYSE) rose after it reported its highest annual operating profit ever, even as foreign exchange losses and higher interest rates dented earnings in the fourth quarter.

Seagen Inc stock rose 12.2% after the Wall Street Journal reported it Pfizer (NYSE:) was in early talks to acquire the biotech company. Pfizer shares fell 1.1 percent.

American railroad operator Union Pacific (NYSE::) jumped 9.6% as CEO Lance Fritz said he would step down, a move that followed calls from hedge fund Soroban Capital Partners for his ouster.

Fisker Inc rose 23.7% after the electric vehicle maker reported increased orders for its Ocean SUV and maintained its production forecast for the year.

Advances outnumbered losers 4.29 to 1 on the New York Stock Exchange and 2.66 to 1 on the Nasdaq.

The S&P posted a new 52-week high and three new lows, while the Nasdaq posted 37 new highs and 28 new lows.