© Reuters. Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., December 7, 2022. REUTERS/Brendan McDermid
By Amruta Khandekar and Ankika Biswas
(Reuters) – Wall Street’s main indexes rose on Wednesday, boosted by a rebound in growth stocks as U.S. Treasury yields dipped, with sentiment bolstered by optimism around China’s moves to reopen its economy.
Apple Inc (NASDAQ:) and Microsoft Corp (NASDAQ:) advanced over 0.6% each as slipped to 3.83% from 3.86% on Tuesday .
Among the major sectors, technology and consumer discretionary gained nearly 0.5% and 1% respectively, while healthcare shares also were a major boost to the benchmark index.
Tesla (NASDAQ:) Inc rose 5.3%, after hitting its lowest level in more than two years in the previous session over demand worries in China. Still, the stock is down 67% for the year.
Energy stocks bucked the trend as oil prices slipped on concerns about a surge in COVID-19 cases in top oil importer China. [O/R]
Beijing began dismantling its strict COVID curbs this month in an abrupt policy U-turn and on Monday announced it would drop its quarantine rule for inbound travelers from next month.
Markets initially cheered the move on hopes it would spur a rebound in COVID-hammered Chinese economy, but a jump in infections has fanned fresh worries.
“What people are underestimating is the fact that the second largest economy in the world is now reopening and all that economic activity is going to benefit the U.S.,” said Thomas Hayes, chairman at Great Hill Capital LLC in New York.
“The speed at which they have reversed their stance has caught people off guard. People are skeptical because the last two years have been such a debacle in China.”
As markets enter the last leg of a grueling year for equities on fears of a recession from the fastest pace of rate hikes by the Federal Reserve since the early 1980s, focus has shifted to 2023 and the outlook for corporate earnings.
The benchmark S&P 500 is down 19% year-to-date and set for its biggest annual loss since the financial crisis of 2008. The rout has been more severe for the tech-heavy , down 34% for the same period.
Both indexes ended lower on Tuesday at the beginning of a holiday-shortened week as growth stocks bore the brunt of investor angst over how long the Fed would continue to raise interest rates to tame high prices.
While recent data pointing to an easing of inflationary pressures has bolstered hopes of smaller rate hikes, a tight labor market and a resilient American economy have spurred worries that rates could stay higher for longer.
Markets are now pricing in 69% odds of a 25-basis point rate hike at the U.S. central bank’s February meeting and see rates peaking at 4.94% in the first half of next year..
At 9:46 a.m. ET, the was up 84.40 points, or 0.25%, at 33,325.96, the S&P 500 was up 13.16 points, or 0.34%, at 3,842.41, and the Nasdaq Composite was up 37.18 points, or 0.36%, at 10,390.41.
Southwest Airlines (NYSE:) Co slipped 2.5% as the carrier came under fire from the U.S. government on Tuesday after it canceled thousands of flights.
Advancing issues outnumbered decliners by a 1.72-to-1 ratio on the NYSE and 1.79-to-1 ratio on the Nasdaq.
The S&P index recorded seven new 52-week highs and two new lows, while the Nasdaq recorded 26 new highs and 170 new lows.
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