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Wall Street rallies, led by Tesla and other growth stocks

05/17/2022 | 02:55pm EDT

(For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window)

* Walmart slides after cutting earnings forecast

* April retail sales rise in line with estimates

* Indexes: S&P 500 +1.27%, Nasdaq +1.76%, Dow +0.74%

May 17 (Reuters) - Wall Street rallied on Tuesday, lifted by Apple, Tesla and other megacap growth stocks after strong retail sales in April eased worries about slowing economic growth.

Ten of the 11 major S&P sector indexes advanced, with financials, materials and technology each up over 2%.

Investors were cheered by data showing U.S. retail sales increased 0.9% in April as consumers bought motor vehicles amid an improvement in supply and frequented restaurants.

Recently punished shares of Microsoft Corp, Apple Inc, Tesla Inc and Amazon gained between 1.3% and 4.4%, lifting the S&P 500 and the Nasdaq.

Tuesday's broad rally followed weeks of selling on the U.S. stock market that last week saw the S&P 500 sink to its lowest level since March 2021.

"The largest pockets of stocks that investors tend to buy have been essentially beaten up. They're either in correction or bear market territory," said Sylvia Jablonski, chief investment officer of Defiance ETF. "I think investors are looking at these opportunities to buy on the dip, and I suspect that today is a good day to do that."

The S&P 500 Banks index jumped 3.1%, with Citigroup climbing 7.9% after Warren Buffett's Berkshire Hathaway disclosed a nearly $3 billion investment in the U.S. lender.

Another set of economic data showed industrial production accelerated 1.1% last month, higher than estimates of 0.5%, and faster than a 0.9% advance in March.

"This is consistent with continued economic growth in the second quarter and not a recession underway," said Bill Adams, chief economist for Comerica Bank in Dallas.

The U.S. Federal Reserve will "keep pushing" to tighten U.S. monetary policy until it is clear inflation is declining, Fed Chair Jerome Powell said at an event on Tuesday.

Traders are pricing in an 85% chance of a 50-basis point rate hike in June.

In afternoon trading, the S&P 500 was up 1.27% at 4,059.02 points.

The Nasdaq gained 1.76% to 11,868.20 points, while Dow Jones Industrial Average was up 0.74% at 32,461.93 points.

Walmart Inc tumbled about 11% after the retail giant cut its annual profit forecast, signaling a bigger hit to margins.

Retailers Costco, Target and Dollar Tree fell between 0.9% and 2.1%.

United Airlines Holdings Inc gained 7.3% after the carrier lifted its current-quarter revenue forecast, boosting shares of Delta Air, American Airlines and Spirit Airlines.

A positive first-quarter earnings season has been overshadowed by worries about the conflict in Ukraine, soaring inflation, COVID-19 lockdowns in China and aggressive policy tightening by central banks.

The S&P 500 is down about 15% so far in 2022, and the Nasdaq is off 24%, hit by tumbling growth stocks.

U.S.-listed Chinese stocks jumped on hopes that China will ease its crackdown on the technology sector.

Advancing issues outnumbered declining ones on the NYSE by a 3.58-to-1 ratio; on Nasdaq, a 3.15-to-1 ratio favored advancers.

The S&P 500 posted one new 52-week high and 30 new lows; the Nasdaq Composite recorded 21 new highs and 108 new lows.

(Reporting by Amruta Khandekar and Devik Jain in Bengaluru, and Noel Randewich in Oakland, Calif.; Editing by Shounak Dasgupta and Lisa Shumaker)

© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
AMAZON.COM, INC. -0.57% 112.85 Delayed Quote.-34.28%
AMERICAN AIRLINES GROUP INC. -0.29% 13.82 Delayed Quote.-26.89%
APPLE INC. 0.62% 142.56 Delayed Quote.-21.76%
BERKSHIRE HATHAWAY INC. -0.15% 413459.63 Delayed Quote.-7.72%
COSTCO WHOLESALE CORPORATION 1.07% 492.62 Delayed Quote.-13.99%
DOLLAR TREE, INC. 0.61% 165.335 Delayed Quote.17.31%
MICROSOFT CORPORATION 0.66% 264.46 Delayed Quote.-22.82%
NASDAQ COMPOSITE -0.10% 11301.13 Real-time Quote.-28.87%
S&P 500 -0.13% 3824.51 Real-time Quote.-19.61%
TESLA, INC. -1.39% 689.28 Delayed Quote.-33.84%
UNITED AIRLINES HOLDINGS, INC. -1.81% 36.27 Delayed Quote.-15.56%
WALMART INC. 1.42% 125.91 Delayed Quote.-15.25%
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