S&P 500 and Nasdaq edge higher on Tesla’s gains

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, US, June 30, 2022. REUTERS/Brendan McDermid/File Photo

(Reuters) – The Nasdaq and Standard & Poor’s 500 indexes rose on Thursday as gains in electric car maker Tesla after strong quarterly results helped offset declines in telecom and energy shares.

Tesla (TSLA.O) It rose 9.3%, while telecom stocks fell after AT&T Inc (Tennessee) It lowered its cash flow forecast, saying some subscribers were delaying bill payments and energy stocks fell due to weak crude prices. Read more

Tesla’s profits benefited from increases in the price of its cars and helped offset production challenges. Optimistic reports from the automaker and streaming giant Netflix (NFLX.O) The huge growth stocks that came under pressure were boosted by higher interest rates.

“Could Tesla offer a short-term rally? Yes, sure,” said Giuseppe Seit, president of quantum research firm Toggle.

“However, it does seem likely that if we are truly in an era of cash withdrawal and quantitative tightening, the rallies on high-momentum stocks like Tesla may not be secular or cyclical, but only short-lived.”

Technology S&P 500 (.SPLRCT) It rose 1.1%, while the telecom services index (.SPLRCL) decreased 0.5%. AT&T shares fell 7.2% and rivals Verizon Communications Inc (VZ.N) and T-Mobile US Inc (TMUS.O) It fell nearly 2.7% each.

Falling oil prices hit the S&P 500 energy sector (.SPNY)which lost 2.6% to lead declines across 11 major sectors.

Market participants are now eagerly awaiting the Federal Reserve’s meeting next week where policy makers are expected to raise interest rates by 75 basis points.

Rising inflation has also led the European Central Bank to recently join its global peers in a rate hike cycle with a massive 50bp increase. Read more

Next week’s Fed rate decision will be followed by US Q2 GDP data, which is likely to be negative again.

According to a common rule of thumb, two quarters of negative GDP growth means the United States is in a recession. Read more

In the latest indications of a slowing US economy, the number of Americans filing new claims for unemployment benefits rose to an eight-month high and a closely watched gauge of factory activity declined this month. Read more

“We have a combination of the Fed with the expectation that they are going to raise 75 basis points and the macroeconomic environment that has been significantly weakening,” said Michael Green, chief strategist at Simplify Asset Management.

“Markets are more focused on those dynamics and against everything we sold at 20% year-over-year. They obviously reflect a lot of interest in all of these issues.”

At 12:36 p.m. ET, the Dow Jones Industrial Average (.DJI) The S&P 500 rose 32.94 points, or 0.10%, to 31,907.78 (.SPX) The index rose 24.53 points, or 0.62%, to 3,984.43 points, and the Nasdaq Composite (nineteenth) It was up 120.34 points or 1.01% at 12017.99.

Advance issues outnumbered losers by 1.09 to 1 on the New York Stock Exchange and by 1.17 to 1 on the Nasdaq.

The S&P recorded a new 52-week high and 29 new lows, while the Nasdaq recorded 13 new highs and 29 new lows.

Additional reporting by Shriyashi Sanyal and Aniruda Ghosh in Bengaluru; Editing by Aaron Coeur

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