Wall Street mixed as energy rallies and Tesla tumbles
Wall Street was congested on Monday, with energy stocks rallying and Tesla and other growth stocks falling as concerns about a global recession and rising interest rates dented Chinese economic data.
China’s economic activity fell sharply in April as the widening of COVID-19 lockdowns hit consumption, industrial production and employment, prompting fears that the economy could shrink in the second quarter.
However, energy stocks got a lift from optimism that China would see significant demand recovery after positive signs that the coronavirus pandemic was easing in the hardest-hit sectors.
The S&P 500 Energy Index jumped 3.6%, making it the strongest performer among the 11 sector indexes.
Investors questioned whether a strong day on Wall Street last Friday could signal the end of the recent sell-off that has left the S&P 500 down nearly 16% from its record high in January.
“After the big rally on Friday, people are looking around and asking if that sounds sustainable,” said Ross Mayfield, an investment strategist at Baird in Louisville, Kentucky. “Does it seem like the tempo you see louder comes with less, or is there still more dedication to work with?”
Wall Street’s megacap growth stocks were mostly lower, with Tesla down about 5% and Amazon down 1.2%. Microsoft rose 1.2%.
The S&P 500 Healthcare Sector Index was up 1%, a 3.3% jump at Eli Lilly & Co. after the drugmaker secured US approval for tirazeptide to treat adults with type 2 diabetes.
Investors are worried that aggressive interest rate hikes by the US Federal Reserve to combat decades of high inflation could push the economy into recession, conflicts in Ukraine, supply chain snares and pandemic-related lockdowns in China exacerbate economic troubles. can.
Monday’s data showed factory activity in New York state declined for the third time this year in May, amid a drop in new orders and shipments.
Traders are now pricing in an 86 percent chance of a 50-basis-point hike by the Fed in June.
In afternoon trading, the Dow Jones Industrial Average was up 0.6% at 32,389.04, while the S&P 500 was up 0.20% at 4,032.01.
The Nasdaq Composite fell 0.41% to close at 11,757.12.
After worrying data on inflation and consumer sentiment last week, investors are paying attention to the retail sales data on Tuesday.
Retailers including Walmart Inc., Home Depot and Target Corp. are due to report their quarterly results this week.
Spirit Airlines jumped 13% after JetBlue Airways launched a hostile takeover bid for the discount carrier. Shares of JetBlue slid 4.5%, while shares of rival bidder Frontier Group gained nearly 7%.
Advancing issues that declined to a 1.38-to-1 ratio on the NYSE; On the Nasdaq, a 1.02-to-1 ratio favored the downside.
The S&P 500 posted a new 52-week high and 31 new lows; The Nasdaq Composite posted 16 new highs and 160 new lows.