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(Reuters) – The Nasdaq index moved higher in early session on Monday as beaten-down growth stocks tried to stage a comeback from a steep selloff that was triggered by worries of a central bank-induced recession.
The benchmark S&P 500 index also showed signs of steadying after briefly falling below its mid-June closing low of 3,666 on Friday that almost erased a sharp summer rebound.
Hints from the U.S. Federal Reserve that high interest rates could last through 2023 sent the three major stock indexes tumbling between 4% and 5% last week, with the Dow Jones index coming within spitting distance of a bear market in the previous session.
Sectors housing megacap growth companies, including technology, consumer discretionary and communication services, led the gains.
Apple Inc (NASDAQ:AAPL), Microsoft Corp (NASDAQ:MSFT), Amazon.com Inc (NASDAQ:AMZN) and Tesla (NASDAQ:TSLA) Inc rose between 0.9% and 2.0%, boosting the Nasdaq index.
“You’re just seeing a relief rally after a very tough stretch of performance for the Nasdaq and growth stocks,” said Jeffrey Schulze, investment strategist at ClearBridge Investments.
“You have obviously seen a lot of pain in the growth areas of the market over the course of the last month as investors reprice higher Fed funds rates and ultimately a terminal rate or this hiking cycle.”
Shares of casino operators Wynn Resorts (NASDAQ:WYNN), Las Vegas Sands (NYSE:LVS) Corp and Melco Resorts & Entertainment (NASDAQ:MLCO) jumped between 11.6% and 30.4% after Macau planned to open to mainland Chinese tour groups in November for the first time in almost three years.
At 10:09 a.m. ET the Dow Jones Industrial Average was down 119.29 points, or 0.40%, at 29,471.12, the S&P 500 was up 3.43 points, or 0.09%, at 3,696.66 and the Nasdaq Composite was up 103.91 points, or 0.96%, at 10,971.84.
Defensive parts of the market, including sectors such as the S&P 500 utilities and real estate, fell more than 1% each, suggesting a risk-on move.
Trading sentiment earlier in the day was dictated by dramatic moves in the global forex market as the sterling briefly touched an all-time low on worries that the new British government’s fiscal plan threatened to stretch the country’s finances to their limits. [MKTS/GLOB]
The CBOE Volatility index, also commonly known as Wall Street’s fear gauge, hovered near three month highs.
Declining issues outnumbered advancers for a 1.29-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.67-to-1 ratio on the Nasdaq. The S&P index recorded no new 52-week high and 37 new lows, while the Nasdaq recorded nine new highs and 183 new lows.
