Tech and energy shares boost Wall St in bear market rally By Reuters

© Reuters. FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, US, June 15, 2022. REUTERS/Brendan McDermid/File Photo

By Devik Jain and Anisha Sircar

(Reuters) – Wall Street’s major indices climbed Tuesday as investors picked up shares of megacap growth and energy companies that were hammered into defeat last week amid concerns about a global economic downturn.

All 11 major S&P sectors made progress in the short-term recovery. The S&P 500 and Nasdaq are still in a bear market, with the benchmark index falling 21.6% from its all-time high on January 3.

“We still view this as a rally in a bear market. Right now this is just a miracle of a day and investors have seen this film before,” said Ken Mahoney, chief executive officer of Mahoney Asset Management.

Energy was the biggest winner, up 4.3%, after losing more than 17% last week. Apple Inc (NASDAQ:) and Tesla (NASDAQ:) Inc were up 3.8% and 10.8% respectively, boosting the S&P 500 and tech-heavy Nasdaq.

“So while we have this rally today, I’m looking at the volatility index that’s just dropped a little bit, it’s not really buying this. There’s still quite a bit of nervousness in the markets.”

The CBOE volatility index, also known as the Wall Street fear meter, fell to 29.94 points, its lowest level since June 15, but still well above its long-term average of 19.6 points.

It had posted its biggest weekly percentage drop since March 2020 in the previous session, as investors feared aggressive moves by global central banks to fight inflation would slow economic growth.

Markets have priced in further rate hikes in July and September amid growing doubts about whether the US central bank can bring about a soft landing for the economy and avoid a recession.

Goldman Sachs (NYSE:) now expects a 30% chance of the US economy entering a recession in the coming year, up from the earlier forecast of 15%.

“The market may have already priced in a shallow recession… you had negative GDP in the first quarter, so it’s possible the second quarter is negative, in which case the recession could potentially be in the rearview mirror,” Thomas Hayes , board member of Great Hill Capital in New York said.

All eyes are now on Fed Chair Jerome Powell’s testimony to the Senate Banking Committee on Wednesday for clues about future rate hikes.

At 11:43 a.m. ET, the S&P 500 was up 550.36 points, or 1.84%, to 30,439.14, the S&P 500 was up 90.52 points, or 2.46%, to 3,765.36, and the S&P 500 rose 323.46 points, or 3.00%, to 11,121.81.

Kellogg (NYSE:) Co. climbed 4.1% after the breakfast cereal maker said it split itself into three separate companies with a focus on snacking.

Spirit Airlines (NYSE:) rose 8% as JetBlue Airways (NASDAQ:) softened its offer to convince the ultra-low-cost carrier to accept its offer over rival Frontier Airlines’ proposal.

The number of emerging issues surpassed the number of rejecters by a 4.86 to 1 ratio on the NYSE and a 3.59 to 1 ratio on the Nasdaq.

The S&P index recorded one new 52-week highs and 30 new lows, while the Nasdaq recorded 34 new highs and 69 new lows.

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