May 23 (Reuters) – The S&P 500 and the Dow rose on Monday, led by gains in banks and Apple after a sharp selloff last week, while a slide in Tesla and chipmakers weighed on the tech-heavy Nasdaq.
Eight of the 11 major S&P sectors advanced in early trading, with financials and energy up more than 1% each.
Banks gained 2.9%, led by a 3.5% jump in shares of JPMorgan Chase & Co (JPM) after the biggest US lender by assets lifted its 2022 outlook for net interest income.
Battered growth stocks Apple Inc. (AAPL) and Microsoft Corp. (MSFT) rose 1.6% and 1.5%, respectively, providing the biggest boost to the S&P 500.
US stock indexes deepened year-to-date losses last week as dismal forecasts from Walmart Inc. (WMT) and other retailers added to worries about surging inflation and its impact on consumers and economic growth.
The benchmark S&P 500 fell over 20% from its Jan. 3 record closing high at one point on Friday, pushing it to the brink of confirming a bear market. The index is now down 17.9% from its all-time closing high.
“It doesn’t surprise me and that’s what you will start to see when you are bouncing along the bottom, it is an indication that equities are becoming more attractive,” said Christopher Grisanti, chief equity strategist at MAI Capital Management.
“The more folks think there is going to be a recession, the less they are going to worry about inflation. If the economy is slowing down … the Federal Reserve won’t have to raise interest rates quite as high as before.”
Readings on the second estimate of first-quarter US GDP, PCE price index and durable goods data for April are due this week, likely providing clues on how the world’s largest economy is faring amid decades-high inflation.
The Federal Reserve’s May meeting minutes, due on Wednesday, will be closely parsed for signs on how aggressively the US central bank is planning to raise interest rates. Money markets are pricing in 50-basis point rate hikes by the Fed in June and July.
At 10:04 a.m. ET, the Dow Jones Industrial Average .DJI was up 271.16 points, or 0.87%, at 31,533.06 and the S&P 500 was up 13.44 points, or 0.34%, at 3,914.80.
The Nasdaq Composite was down 37.56 points, or 0.33%, at 11,317.06, dragged down by Tesla Inc. (TSLA), Nvidia Corp. (NVDA) and Amazon.com (AMZN).
Cloud service provider VMWare Inc VMW.N surged 16.9% after reports over the weekend said chipmaker Broadcom Inc. (AVGO) was in talks to acquire the company. Broadcom fell 4.9%.
US-listed shares of Didi Global (DIDI) added 3.5% after a majority of the Chinese ride-hailing giant’s shareholders voted in favor of its plan to delist from the New York Stock Exchange.
Advancing issues outnumbered decliners by a 1.46-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.00-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week high and 31 new lows, while the Nasdaq recorded 15 new highs and 63 new lows.
(Reporting by Devik Jain and Anisha Sircar in Bengaluru; Editing by Saumyadeb Chakrabarty, Shounak Dasgupta and Maju Samuel)