NEW YORK, May 11 — The S&P 500 and Nasdaq ended higher yesterday, with big growth shares rising after the previous day’s selloff as Treasury yields tumbled.
Bank shares fell along with yields. The benchmark 10-year note yield dropped from more than a three-year high to below 3 per cent.
The Dow also ended lower, and the day’s trading was choppy, with major indexes moving between gains and losses as investors were nervous ahead of the release of today's US consumer price index data and tomorrow's producer prices data.
Investors will be looking for signs that inflation is peaking.
Worries that the US Federal Reserve may have to move more aggressively to curb inflation have driven the recent selloff in the market. A host of other concerns have added to the pressure.
“It’s just fear-based selling,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.
“It can’t just be the Fed’s going to raise rates to stave off inflation, because we’ve seen that before,” he said. Instead, investors have been worried about everything from rates and inflation to the war in Ukraine, supply chain problems and China’s Covid-19 lockdowns, Dollarhide said.
Shares of Apple Inc rose 1.6 per cent and gave the S&P 500 and Nasdaq their biggest boosts.
The Dow Jones Industrial Average fell 84.96 points, or 0.26 per cent, to 32,160.74, the S&P 500 gained 9.81 points, or 0.25 per cent, to 4,001.05 and the Nasdaq Composite added 114.42 points, or 0.98 per cent, to 11,737.67.
Technology and growth stocks, whose valuations rely more heavily on future cash flows, have been among the hardest hit in the recent selloff. The Nasdaq is down about 25 per cent for the year so far.
S&P 500 technology rose 1.6 per cent on the day and led S&P 500 sector gains. The S&P 500 growth index was up 0.9 per cent, while the S&P 500 value index was down 0.4 per cent.
Investors digested comments from Cleveland Fed President Loretta Mester, who said the US economy will experience turbulence from the Fed’s efforts to bring down inflation running at more than three times above its goal and recent volatility in the stock market would not deter policymakers.
US President Joe Biden in a speech yesterday addressing high inflation said he was considering eliminating Trump-era tariffs on China as a way to lower prices for goods in the United States.
Among the day’s gainers, Pfizer Inc shares rose 1.7 per cent after it said it will pay US$11.6 billion (RM50.8 billion) to buy Biohaven Pharmaceutical Holding Co Biohaven shares jumped 68.4 per cent.
On the down side, Peloton Interactive Inc dropped 8.7 per cent as the fitness equipment maker warned the business was “thinly capitalised” after it posted a 23.6 per cent slide in quarterly revenue.
Volume on US exchanges was 15.45 billion shares, compared with the 12.55 billion average for the full session over the last 20 trading days.
Declining issues outnumbered advancing ones on the NYSE by a 1.36-to-1 ratio; on Nasdaq, a 1.34-to-1 ratio favoured decliners.
The S&P 500 posted 1 new 52-week highs and 63 new lows; the Nasdaq Composite recorded 19 new highs and 1,066 new lows. — Reuters