Wall Street Climbs As Tech Stocks Rebound, Oil Drops
Wall Street's main indexes rose on Wednesday as technology and growth stocks rebounded after a three-day slump on rate hike worries, while weaker-than-expected private payrolls data and a slide in oil prices helped ease some worries about inflation.
Tech titans Apple Inc, Microsoft Corp and Alphabet Inc rose between 0.9% and 1.4% in early trading after taking a beating in last few days due to a surge in Treasury yields.
Social media stocks surged after Snap Inc said it will cut 20% of all staff, restructure its advertising sales unit and shut down projects including mobile games and novelties like a flying drone camera, in order to focus on improving sales and the number of Snapchat users.
Shares of Snap jumped 11.4%, while those of Twitter Inc, Pinterest and Meta Platforms added between 1.5% and 5.8%.
An ADP National Employment report showed private payrolls increased by 132,000 jobs in August, falling short of economists' forecast of job growth of 288,000, according to a Reuters poll.
The more comprehensive and closely watched jobs data on Friday is expected to show nonfarm payrolls rose by 300,000 last month after recording a 528,000 increase in July.
Any signs of a cooling job market would be welcomed by investors as it could ease the pressure on the Federal Reserve to stick to outsized rate hikes.
"We continue to believe that the U.S. economy is relatively strong compared to Europe but the Fed will not believe that inflation is coming down until we see a couple of months of drop in prices," said Jay Hatfield, chief executive officer at Infrastructure Capital Management in New York.
Still, the three main indexes are set for sharp monthly declines, with the tech-heavy Nasdaq down 3% after Fed Chair Jerome Powell's blunt and hawkish remarks on Friday about keeping monetary policy tight "for some time" quashed hopes of more modest rate hikes.
Meanwhile, mixed economic data signaling an easing of price pressures and a tight labor market has weighed on investors' minds heading into September, which is typically a weak month for stock market returns.
The benchmark S&P 500 is up 10% from its mid-June lows but remains in the bear market after plummeting earlier this year.
At 9:55 a.m. ET, the Dow Jones Industrial Average was up 101.91 points, or 0.32%, at 31,892.78, the S&P 500 was up 24.65 points, or 0.62%, at 4,010.81, and the Nasdaq Composite was up 132.78 points, or 1.12%, at 12,015.92.
Energy stocks fell 1.7% and underperformed the broader market as U.S. crude prices slid 1.4% to $90.31 a barrel on recession fears. [O/R]
"If oil is down that means inflation is coming down. There is a 5% bleed through from oil prices to core CPI," Hatfield said.
Netflix Inc gained 5.7% after it hired two of Snap Inc's top executives to help the streaming giant with its advertising-supported tier plan.
Chewy Inc slid 4.1% after the online pet supplies retailer cut its full-year 2022 sales outlook, while PVH Corp fell 3.4% as the Calvin Klein owner slashed 2022 profit outlook.
Bed Bath & Beyond Inc slumped 22.8% after saying it would close 150 stores and cut about 20% of its corporate and supply chain workforce as the cash-strapped home goods retailer struggles to turn around its business.
Advancing issues outnumbered decliners by a 1.75-to-1 ratio on the NYSE and by a 2.15-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week high and five new lows, while the Nasdaq recorded nine new highs and 48 new lows.
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