Wall Street closes with sharp gains as the last quarter begins

(Reuters) – Wall Street’s three major indexes rose to close more than 2% on Monday as US Treasury yields tumbled on weaker-than-expected manufacturing data, adding to the allure of stocks at the start of the fourth quarter.

The US stock market has suffered three consecutive quarterly declines in a turbulent year marked by interest rate hikes to tame historically high inflation, and concerns about a slowing economy.

Art Hogan, chief market strategist at BP, said:

Further supporting rate-sensitive growth stocks, the 10-year US Treasury yield fell after British Prime Minister Liz Truss was forced to reverse course on tax cuts to the highest rate.

All 11 major S&P 500 (.SPX) Sectors advanced into positive territory, with energy (.SPNY) Being the big winner.

Major oil companies Exxon Mobil Corp (XOM.N) Chevron Corp shares rose more than 5 percent, tracking a jump in crude prices, as sources said that the Organization of the Petroleum Exporting Countries and its allies are studying the largest production cut since the start of the Covid-19 pandemic.

Tech companies and Megacap growth like Apple (AAPL.O) and Microsoft Corporation (MSFT.O) rose more than 3% sequentially, while banks advanced <.SPXBK> 3%.

The data showed manufacturing activity increased at its slowest pace in nearly two and a half years in September as new orders contracted and higher interest rates to tame inflation likely dented demand for goods. Read more

The Institute for Supply Management said its manufacturing PMI fell to 50.9 this month, missing estimates but still above 50, indicating growth.

“The flow of economic data has actually been worse than expected,” Hogan said. “In a very unexpected way that is likely to be good news for stock markets.”

“(While) good economic data, strong readings have been a catalyst to sell, this is the first time we have seen some negative news as a catalyst.”

The three major indices ended the volatile third quarter lower on Friday amid growing concerns that the Federal Reserve’s aggressive monetary policy will push the economy into recession.

Dow Jones Industrial Average (.DJI) It rose 765.38 points, or 2.66%, to 29,490.89 points. Standard & Poor’s 500 (.SPX) It gained 92.81 points, or 2.59%, at 3,678.43 points. And the Nasdaq (nineteenth) It added 239.82 points, or 2.27%, at 10,815.44 points.

Volume on US stock exchanges was 11.61 billion shares compared to an average of 11.54 billion for the full session over the last 20 trading days.

Tesla Corporation (TSLA.O) It fell 8.6% after it sold fewer cars than expected in the third quarter as deliveries were delayed from production due to logistical obstacles. Lucid peer group (LCID.O) Gain 0.9% and Rivian Automotive (Rivno) It fell 3.1%. Read more

Major automakers are expected to report modest declines in new car sales in the United States, but analysts and investors are concerned that a dark economic picture, rather than a shortage of inventory, will lead to weak auto sales. Read more

Citigroup and Credit Suisse become the latest brokerages to cut year-end 2022 targets for the S&P 500 index, as US stock markets bear the pressure of aggressive central bank actions to curb inflation. Read more

Credit Suisse also set a target for the end-of-year 2023 price of the benchmark at 4,050 points, adding that 2023 will be “a year of weak growth, non-stagnation and declining inflation.”

Advance issues outnumbered losers on the New York Stock Exchange by 5.04 to 1. On Nasdaq, the ratio was 2.70 to 1 in favor of advanced shares.

The S&P 500 hit a new 52-week high and 23 new low; The Nasdaq Composite recorded 58 new highs and 282 new lows.

Reporting by Echo Wang in New York; Additional reporting by Ankika Biswas and Bansari Mayor Kamdar in Bengaluru; Editing by Anil de Silva, Aaron Coeur and Richard Chang

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