Wall Street is recovering modestly after last week’s sell-off

  • US Treasury yields fall after rally
  • Seagen peaks over Pfizer buyout report
  • Union Pacific steps down as CEO to step down
  • Dow 0.43% higher, S&P 500 0.58% higher, Nasdaq 0.94% higher

NEW YORK, Feb. 27 (Reuters) – US stocks rose modestly on Monday as investors went on a bargain hunt after last week’s losses, the largest percentage decline of 2023 for major benchmarks, on jitters over possible rate hikes to tame stubbornly high inflation .

Each of the three main indices rose more than 1% shortly after the opening bell, partly due to an easing in government bond yields. Thereafter, the stock gave up some gains as returns came from the day’s lows. Yields on two-year government bonds, which typically move in line with interest rate expectations, fell after reaching a high in nearly four months.

“A bit of a bounce because Friday’s reaction was an overreaction,” said Ken Polcari, managing partner at Kace Capital Advisors in Boca Raton, Florida.

“If inflation doesn’t ease and inflation continues to rise in the coming months, the Fed could absolutely drive inflation up. The realization now is that there won’t be a turning point this year and the people who still think there’s going to be a turning point this year. years their heads must be examined.”

The Dow Jones Industrial Average (.DJI) rose 141.43 points, or 0.43%, to 32,958.35, the S&P 500 (.SPX) gained 23.19 points, or 0.58%, to 3,993.23 and the Nasdaq Composite (.IXIC) added 107.45 points, or 0.94%, to 11,502.39.

Last week, the Dow Industrials fell by their largest weekly percentage decline since September, and the S&P 500 and Nasdaq saw their largest weekly percentage decline since December, as economic data and comments from US Federal Reserve officials bolstered expectations that the central bank will be more aggressive. be in raising interest rates.

Economists at British banks Barclays and NatWest think the Fed could increase the pace of its March rate hikes by half a point. Morgan Stanley said it sees no more Fed cuts this year and expects a slower pace of 25 basis points when the central bank starts cutting rates.

Fed Funds futures show traders are pricing in a third 25 basis point hike this year and see interest rates peak at 5.4% by September.

Fed Governor Philip Jefferson said he had “no illusions” that inflation would soon fall back to target and that he was determined to maintain restrictive monetary policy for as long as necessary.

Data showed that new orders for key US-made capital goods rose more than expected in January, while shipments of core goods recovered, suggesting that equipment spending picked up.

Falling earnings helped growth stocks (.RLG) recover 0.91%, while Tesla (TSLA.O) rose 6.14% after the electric car maker said its Brandenburg plant near Berlin was producing 4,000 cars a week, three weeks ahead of schedule according to a recent report. production plan reviewed by Reuters.

Seagen Inc (SGEN.O) rose 9.73% after the Wall Street Journal reported that Pfizer (PFE.N) was in early talks to acquire the biotech company. Pfizer shares lost 1.69%.

US rail operator Union Pacific (UNP.N) climbed 10.08% as Chief Executive Lance Fritz said he would resign. Hedge fund Soroban Capital Partners had called for his impeachment.

Emerging issues outnumbered declining issues on the NYSE by a ratio of 2.30 to 1; on Nasdaq, a ratio of 1.66 to 1 was in favor of progress.

The S&P 500 posted four new highs in 52 weeks and five new lows; the Nasdaq Composite recorded 58 new highs and 82 new lows.

Reporting by Chuck Mikolajczak; Edited by David Gregorio

Our Standards: The Thomson Reuters Principles of Trust.


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