- Tesla down as third-quarter deliveries miss market estimates
- US factory activity was slowest in about 2.5 years in September -ISM
- Credit Suisse, Citi cut 2022 year-end target for S&P 500
- Indexes up: Dow 2.66%, S&P 500 2.59%, Nasdaq 2.27%
Oct 3 (Reuters) – Wall Street’s three main indexes rallied to close more than 2 percent on Monday as U.S. Treasury yields fell on weaker-than-expected manufacturing data , increasing the attractiveness of the shares at the start 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 tame historically high inflation and worries about a slowing economy.
“U.S. yield markets (are) pulling back, that’s been positive … and that implies a riskier environment,” said Art Hogan, chief market strategist at B. Riley Wealth in Boston.
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Also supporting rate-sensitive growth stocks, the benchmark US 10-year Treasury yield fell after British Prime Minister Liz Truss was forced to reverse course on a tax cut for the highest type.
All 11 major sectors of the S&P 500 (.SPX) advanced into positive territory, with energy (.SPNY) the biggest gainer.
Oil majors Exxon Mobil Corp ( XOM.N ) and Chevron Corp rose more than 5 percent, following a rise in crude prices as sources said the Organization of the Petroleum Exporting Countries and its allies are considering its biggest production cut since the start of COVID-19. -19 pandemic.
Megacap growth and technology companies such as Apple Inc ( AAPL.O ) and Microsoft Corp ( MSFT.O ) rose more than 3 percent respectively, while banks <.SPXBK> they advanced by 3%.
Data showed manufacturing activity rose at its slowest pace in nearly 2-1/2 years in September as new orders contracted, likely as rising interest rates to control inflation cooled the demand for goods. Read more
The Institute for Supply Management said its manufacturing PMI fell to 50.9 this month, missing estimates but still above 50, indicating growth.
“The flow of economic data actually came in worse than expected. In a very counterintuitive way that probably represents 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 had been a catalyst for the sell-off, this is the first time we’ve seen some negative news being a catalyst.”
All three major indexes closed a volatile third quarter lower on Friday amid growing fears that the Federal Reserve’s aggressive monetary policy will tip the economy into recession.
The Dow Jones Industrial Average (.DJI) rose 765.38 points, or 2.66%, to 29,490.89; the S&P 500 (.SPX) gained 92.81 points, or 2.59%, to 3,678.43; and the Nasdaq Composite (.IXIC) added 239.82 points, or 2.27%, to 10,815.44.
Volume on US exchanges was 11.61 billion shares, compared with the full session average of 11.54 billion over the past 20 trading days.
Tesla Inc ( TSLA.O ) fell 8.6 percent after selling fewer vehicles than expected in the third quarter as deliveries lagged far behind production due to logistical hurdles. Peers Lucid Group ( LCID.O ) gained 0.9% and Rivian Automotive ( RIVN.O ) fell 3.1%. Read more
Major automakers are expected to report modest declines in new vehicle sales in the U.S., but analysts and investors fear a darkening economic outlook, not inventory shortages, is driving car sales weaker Read more
Citigroup and Credit Suisse became the latest brokerages to cut 2022 closing targets for the S&P 500 as US equity markets bear the heat from aggressive central bank action to curb inflation . Read more
Credit Suisse also set a year-end 2023 price target for the benchmark at 4,050 points, adding that 2023 would be a “year of weak, non-recessionary growth and falling inflation.”
Advancing issues outnumbered decliners on the NYSE by a ratio of 5.04 to 1; on the Nasdaq, a ratio of 2.70 to 1 favored the advancers.
The S&P 500 hit 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 by Echo Wang in New York; Additional reporting by Ankika Biswas and Bansari Mayur Kamdar in Bangalore; Editing by Anil D’Silva, Arun Koyyur and Richard Chang
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