Cardinal Health falls on losing contracts with OptumRx
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Tesla down after price cuts in several markets
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Indexes up: Dow 1.2%, S&P 1.4%, Nasdaq 1.4%
(Updates to 2:30 p.m. EDT/1830 GMT)
By Chibuike Oguh
NEW YORK, April 22 (Reuters) – Wall Street stocks advanced on Monday following a market sell-off in previous sessions as investors eyed a busy week for quarterly results from key companies that would provide a glimpse of the U.S. economy’s health.
The benchmark S&P 500 and the Nasdaq were poised to rebound from a decline over the past six sessions which had been caused by investors re-evaluating their expectations on interest rate cuts in the wake of strong economic data, geopolitical tensions, persistent inflation and commentary from Federal Reserve officials.
All 11 S&P 500 sectors were trading higher, with technology and financial stocks leading gains, up between 1.70% and 1.78%.
Markets were gearing up for quarterly results from megacap companies this week, including some of the so-called Magnificent Seven stocks such as Tesla, Meta Platforms, Alphabet and Microsoft.
“I think it’s just standard buy-on-the-dip after a 5% pullback that kind of wakes people up to put money to work,” said Lamar Villere, portfolio manager at Villere & Co in New Orleans.
“Investors are looking ahead to this week with hugely significant earnings coming out and with concerns about what the Fed is doing with pushing back any rate cuts,” Villere added.
Money markets are pricing in only about 41 basis points (bps) of rate cuts this year, down from about 150 bps seen at the beginning of the year, according to LSEG data.
In addition to top corporate earnings, markets are also awaiting the release later this week of the March personal consumption expenditure (PCE) data – the Fed’s preferred inflation gauge – to further ascertain the monetary policy trajectory.
Fed policymakers are in a media blackout period ahead of their policy meeting on May 1.
At 2:28 p.m. EDT, the Dow Jones Industrial Average rose 454.09 points, or 1.20%, to 38,440.49, the S&P 500 gained 69.83 points, or 1.41%, to 5,037.06 and the Nasdaq Composite gained 244.30 points, or 1.60%, to 15,526.31.
Megacap growth stocks edged higher, with Alphabet, Amazon.com and Apple up between 1.1% and 2.1%. Nvidia advanced 4.8%, rebounding from a 10% drop in the previous session.
Tesla shed 3.5% as the electric vehicle maker cut prices in a number of its major markets, including China and Germany, following price reductions in the United States.
Cardinal Health fell 3.9% after the drug distributor said its contracts with UnitedHealth Group’s OptumRx, one of its largest customers, will not be renewed when they expire at the end of June.
Advancing issues outnumbered decliners by a 3.55-to-1 ratio on the NYSE. There were 35 new highs and 68 new lows on the NYSE. On the Nasdaq, 2,911 stocks rose and 1,211 fell as advancing issues outnumbered decliners by a 2.4-to-1 ratio.
The S&P 500 posted 9 new 52-week highs and 4 new lows while the Nasdaq recorded 33 new highs and 169 new lows.
(Reporting by Chibuike Oguh in New York; Additional reporting by Shristi Achar A and Shashwat Chauhan in Bengaluru Editing by Matthew Lewis)
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Published: 23 Apr 2024, 12:46 AM IST