Wall Street climbs after worst weekly sell-off in 2023 By Reuters

Written by Sruthi Shankar

(Reuters) – US stocks jumped on Monday as investors bought battered stocks after major indexes suffered their worst weekly sell-off this year on concerns about monetary tightening.

The Dow Jones Industrial Average erased its gains for the year in selling on Friday, posting a third straight week of losses on concerns that a strong US economy and high inflation will give the Federal Reserve more room to raise interest rates.

However, the mood was buoyant on Monday as US Treasury yields eased after a strong rally, lifting rate-sensitive growth stocks such as Apple Inc (NASDAQ:) and Amazon.com Inc (NASDAQ::) by more than 1%.

Tesla (NASDAQ: ) rose 4% after the electric car maker said its factory in Brandenburg near Berlin was producing 4,000 vehicles a week, three weeks ahead of schedule according to its latest production plan reviewed by Reuters.

“We’re looking at a rally today because the market was down a lot last week,” said Sam Stovall, chief investment analyst at CFRA Research in New York.

“February is historically the second-worst month of the year for the stock market. So investors conclude from a seasonal perspective that stocks probably could rally at least in the near term.”

Yields on two-year notes, which are more sensitive to short-term interest rate expectations, fell after touching a four-month high earlier in the session.

Traders added to their bets from a 50 basis point rise in March after data last week showed that the personal consumption expenditures price index, the measure by which the Fed measures its 2% inflation target, rose 5.4% last month.

Fed fund futures show that traders have priced in third 25 basis point increases this year and see rates peaking at 5.39% by September.

At 9:47 a.m. ET, it was up 200.27 points, or 0.61%, at 33.017.19, the S&P 500 was up 28.03 points, or 0.71%, at 3,998.07, and it was up 104.12 points, or 0.91%, at 11.499. 06.

Data on Monday showed that new orders for US-made capital goods increased more-than-expected in January, but orders for durable goods, which are meant to last three years or more, fell more-than-expected.

After last week’s hawkish rhetoric from Fed policymakers, investors will turn to Fed Governor Philip Jefferson’s speech later in the day.

Profits of Warren Buffett’s Berkshire Hathaway (NYSE: NYSE) rose after it reported its highest annual operating profit ever, even as foreign currency losses and higher interest rates dragged profits lower in the fourth quarter.

Seagen Inc stock rose 12.2% after the Wall Street Journal reported it Pfizer (NYSE:) was in early talks to acquire the biotech company. Pfizer shares fell 1.1 percent.

American railroad operator Union Pacific (NYSE::) jumped 9.6% as CEO Lance Fritz said he would step down, a move that follows calls from hedge fund Soroban Capital Partners for his ouster.

Fisker rose 23.7% after the electric vehicle maker reported increased orders for its Ocean SUV and maintained its production forecast for the year.

Advances outnumbered losers 4.29 to 1 on the New York Stock Exchange and 2.66 to 1 on the Nasdaq.

The S&P posted a new 52-week high and three new lows, while the Nasdaq posted 37 new highs and 28 new lows.