Wall Street mixed as energy rallies and Tesla falls

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 12, 2022. REUTERS/Brendan McDermid/File Photo

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  • Energy index leads as oil recovers
  • Spirit Airlines soars after hostile JetBlue launch
  • Indices: Dow +0.60%, S&P 500 +0.20%, Nasdaq -0.41%

May 16 (Reuters) – Wall Street was mixed on Monday, with energy stocks rallying and Tesla and other growth stocks losing ground as disappointing Chinese economic data added to worries about a global slowdown and rising rates of interest.

China’s economic activity cooled sharply in April as widening COVID-19-related lockdowns weighed heavily on consumption, industrial production and employment, adding to fears that the economy could shrink. contracts in the second trimester. Read more

However, energy stocks were boosted by optimism that China would see a significant recovery in demand after positive signs that the coronavirus pandemic was receding in the hardest hit areas. Read more

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The S&P 500 energy index (.SPNY) jumped 3.6%, making it the best performer among 11 sector indices.

Investors wondered if a strong day on Wall Street last Friday could signal the end of a recent sell-off that left the S&P 500 down about 16% from its January closing high.

“After Friday’s big rally, people are looking around and wondering if this looks sustainable,” said Ross Mayfield, investment strategist at Baird in Louisville, Kentucky. “Does this sound like the surge of momentum you would see coming out of a dip, or is there even more capitulation to be worked out?”

Wall Street megacap growth stocks were mostly lower, with Tesla (TSLA.O) down nearly 5% and Amazon (AMZN.O) down 1.2%. Microsoft (MSFT.O) gained 1.2%.

The S&P 500 healthcare sector index (.SPXHC) rose 1%, buoyed by a 3.3% jump in Eli Lilly & Co (LLY.N) after the drugmaker gained approval for tirzepatide, to treat adults with type 2 diabetes. Read More

Investors fear that aggressive interest rate hikes by the US Federal Reserve to combat decades-high inflation could tip the economy into a recession, the conflict in Ukraine, supply chain problems and pandemic-related lockdowns in China exacerbating economic turmoil.

Monday’s data showed factory activity in New York state slumped in May for the third time this year amid a slump in new orders and shipments. Read more

Traders are now pricing in a nearly 86% chance of a 50 basis point Fed hike in June.

In afternoon trading, the Dow Jones Industrial Average (.DJI) rose 0.6% to 32,389.04 points, while the S&P 500 (.SPX) gained 0.20% to 4 032.01.

The Nasdaq Composite (.IXIC) fell 0.41% to 11,757.12.

S&P 500 trades

Investors are focused on retail sales data due on Tuesday, following worrying data on inflation and consumer sentiment last week.

Retailers such as Walmart Inc (WMT.N), Home Depot (HD.N) and Target Corp (TGT.N) are due to release their quarterly results this week.

Spirit Airlines (SAVE.N) jumped 13% after JetBlue Airways (JBLU.O) launched a hostile takeover bid for the discount carrier. Shares of JetBlue fell 4.5%, while shares of rival bidder Frontier Group (ULCC.O) gained nearly 7%. Read more

Advancing issues outnumbered declining ones on the NYSE by a ratio of 1.38 to 1; on the Nasdaq, a ratio of 1.02 to 1 favored the decliners.

The S&P 500 posted a new 52-week high and 31 new lows; the Nasdaq Composite recorded 16 new highs and 160 new lows.

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Reporting by Amruta Khandekar and Devik Jain in Bengaluru and Noel Randewich in San Francisco; Additional reporting by Devik Jain in Bengaluru; Editing by Shounak Dasgupta and Lisa Shumaker

Our standards: The Thomson Reuters Trust Principles.

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