Wall Street climbs after worst weekly sell-off of 2023 by Reuters

By Sruthi Shankar

(Reuters) – US equities rose on Monday as investors bought down stocks after major benchmarks suffered their worst weekly selloff this year on concerns about tighter monetary policy.

The blue-chip Dow erased its gains for the year in Friday’s sell-off and posted its third straight week of losses on fears that a strong US economy and high inflation will give the Fed more room to raise rates.

The mood was bullish on Monday, however, as US Treasury yields fell after a strong rally, sending price-sensitive growth stocks like Apple Inc (NASDAQ:) and Amazon.com Inc (NASDAQ:) up more than 1%.

Tesla (NASDAQ:) rose 4% after the electric car maker said its factory in Brandenburg near Berlin was producing 4,000 cars a week, three weeks ahead of schedule according to a recent production plan reviewed by Reuters.

“We are looking at a relief rally today because the market was down so much last week,” said Sam Stovall, chief strategist at CFRA Research in New York.

“February is historically the second worst month of the year for the stock market, so investors are inferring from a seasonal perspective that stocks may see some gains in the near term.”

Two-year bond yields, most sensitive to short-term interest rate expectations, fell after nearing a four-month high earlier in the session.

Traders increased their bets on a 50 basis points (bps) increase in March after data last week showed that the personal consumption price index, the measure by which the Fed measures its inflation target of 2%, rose 5.4% last month.

Fed fund futures show traders have priced in a third 25 basis point hike this year and interest rates will see a spike of 5.39% by September.

At 9:47 a.m. ET, the S&P 500 was up 200.27 points, or 0.61%, to 33,017.19, the S&P 500 was up 28.03 points, or 0.71%, to 3,998.07, and was 104.12 points, or Up 0.91% to 11,499.06.

Data on Monday showed new orders for key US-made capital goods rose more than expected in January, but orders for durable goods designed to last three years or more fell more than expected.

Following the aggressive remarks from Fed policymakers last week, investors will refer to Fed Governor Philip Jefferson’s speech later today.

Warren Buffett’s Berkshire Hathaway (NYSE:) Inc took a step up after it reported its highest-ever annual operating profit, even as currency losses and rising interest rates led to lower revenues in the fourth quarter.

Seagen Inc rose 12.2% after the Wall Street Journal reported it Pfizer (NYSE:) was in early talks to acquire the biotech company. Shares of Pfizer fell 1.1%.

American railroad company Union Pacific (NYSE:) rose 9.6% as Chief Executive Lance Fritz said he would step down, a move that followed calls from hedge fund Soroban Capital Partners for his impeachment.

Fisker Inc rose 23.7% after the EV maker reported increased orders for its SUV Ocean and maintained its production forecast for the year.

Emerging issues outnumbered them with a ratio of 4.29 to 1 on the NYSE and 2.66 to 1 on the Nasdaq.

The S&P index recorded one new high in 52 weeks and three new lows, while the Nasdaq recorded 37 new highs and 28 new lows.