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Energy stocks gain as oil prices surge
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Tesla falls after modest sequential sales growth
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Indexes: Dow up 0.7%, S&P up 0.07%, Nasdaq down 0.41%
(Updates to market open)
By Ankika Biswas and Amruta Khandekar
April 3 (Reuters) - U.S. stock indexes were mixed on
Monday as rising oil prices stoked concerns about more interest
rate hikes from the Federal Reserve to temper inflation, while a
jump in shares of energy firms helped stem losses.
Saudi Arabia and other OPEC+ oil producers announced further
output cuts of around 1.16 million barrels per day, threatening
an immediate rise in prices.
This comes just days after cooling inflation raised hopes
that the Fed could soon end its aggressive monetary tightening.
Major technology stocks and other growth shares such as
Amazon.com Inc , Microsoft Corp and Alphabet
Inc fell between 0.8% and 1.2%, pressured by higher
U.S. Treasury yields.
This, coupled with a 3% fall in Tesla Inc after
posting modest quarter-on-quarter sales growth, made information
technology , consumer discretionary and
communication services sectors among the biggest
losers on the S&P 500.
At 9:42 a.m. ET, the Dow Jones Industrial Average was
up 220.42 points, or 0.66%, at 33,494.57, the S&P 500 was
up 3.06 points, or 0.07%, at 4,112.37, and the Nasdaq Composite was down 49.77 points, or 0.41%, at 12,172.14.
However, a 4.5% gain in energy major Chevron Corp and a 2.7% rise in UnitedHealth Group Inc helped the Dow
Jones outshine its peers.
Shares of other energy firms such as Exxon Mobil Corp and Occidental Petroleum Corp were also up 4.9%
and 6.0%, respectively, helping drive a 5.2% jump in the energy
sector.
Bets by traders were largely tilted toward a 25-basis point
rate hike in May, with odds of a pause at 39.1%, according to
CME Group's Fedwatch tool.
"We could see inflation bottom out a little bit higher than
anticipated, which may mean that the Fed continues their rate
hiking a lot longer and further than many currently expect,"
said Paul Nolte, senior wealth adviser and market strategist at
Murphy & Sylvest.
U.S. stocks have weathered turbulence in the global banking
sector to notch gains in the first quarter, with the S&P 500 jumping 7% and bouncing back from a near 20% drop in
2022.
The tech-heavy Nasdaq recorded its strongest first-quarter
jump of 17% since mid-2020.
"We've seen the tech sector rally so hard and so far above
everything else that we do expect some profit taking during the
month of April," Nolte said.
A survey from S&P Global on Monday showed manufacturing
activity stayed in contractionary territory in March.
Manufacturing data from the Institute for Supply Management
is due later in the day.
The quarterly earnings season is also around the corner,
with companies expected to start reporting results in the next
few weeks.
Among other stocks, shares of American Airlines Group Inc and Delta Air Lines Inc edged 0.6% and 1.3%
lower on rising crude prices.
Advancing issues outnumbered decliners for a 1.50-to-1 ratio
on the NYSE and a 1.03-to-1 ratio on the Nasdaq.
The S&P index recorded seven new 52-week highs and no new
low, while the Nasdaq recorded 40 new highs and 28 new lows.
(Reporting by Ankika Biswas and Amruta Khandekar in Bengaluru;
Editing by Arun Koyyur and Shounak Dasgupta)
