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* U.S. Senate approves bill on climate change, drug costs
* Nvidia drops as slump in gaming demand hits Q2 revenue
* Tyson Foods down on quarterly profit miss
* Palantir drops on forecast cut
* Indexes up: Dow 0.78%, S&P 0.86%, Nasdaq 1.29%
Aug 8 (Reuters) - The Nasdaq led U.S. stock indexes higher
on Monday as a pullback in Treasury yields boosted megacap
growth stocks after last week's blockbuster jobs data sparked a
tech selloff on expectations of sharp rate hikes by the Federal
The focus this week will be on consumer prices data on
The S&P 500 has bounced back 13% from its mid-June lows, but
investors fear that signs of persistent inflation this week
could further bolster the Fed's case for aggressive monetary
"While it's clear the Fed needs to continue tightening
policy, there are still about six weeks until the next meeting
and we remind investors that economic data can change very
quickly," said Robert Schein, chief investment officer, Blanke
Schein Wealth Management.
"The CPI data will help to confirm if the Fed's tightening
efforts have been successful in starting to tame inflation or if
continued Fed tightening is needed."
U.S. rate futures have priced in a 68.5% chance of a
75-basis-point hike at the Fed's September meeting, up from
about 41% before payrolls data on Friday beat market
Megacap growth and technology stocks rose in early trading,
with Tesla up 5.2%. The U.S. electric-car maker signed
contracts worth about $5 billion to buy materials for their
batteries from nickel processing companies in Indonesia,
according to a CNBC report.
High-growth stocks such as Apple Inc and Amazon.com
Inc, whose valuations are vulnerable to rising bond
yields, gained as U.S. Treasury yields pulled back from sharp
highs in the previous session.
The benchmark 10-year yield declined to 2.77% as investors
continued to assess an unexpectedly strong jobs report from
"Stocks don't need good data, they need softer yields, as
softer yields push their valuations higher," said Ipek
Ozkardeskaya, senior analyst at Swissquote Bank.
The recovery in equities since July was mostly due to the
easing of U.S. yields on the back of growing recession
expectations and partly due to the better-than-feared earnings
reports, Ozkardeskaya added.
Chipmaker Nvidia Corp fell 4.6% on saying it
expects second-quarter revenue of about $6.70 billion, down 19%
from the prior quarter, largely hurt by weakness in its gaming
Meanwhile, the U.S. Senate on Sunday passed a sweeping $430
billion bill intended to fight climate change, lower drug prices
and raise some corporate taxes.
Signify Health Inc jumped 14.8% on a media report
that CVS Health Corp was looking to buy the health
At 9:50 a.m. ET, the Dow Jones Industrial Average was
up 256.40 points, or 0.78%, at 33,059.87, the S&P 500 was
up 35.81 points, or 0.86%, at 4,181.00, and the Nasdaq Composite
was up 163.05 points, or 1.29%, at 12,820.61.
Palantir Technologies Inc dropped 13.2% after the
data analytics software company lowered its annual revenue
forecast as the timing of some large government contracts
Tyson Foods Inc fell 8.9% on missing quarterly
Advancing issues outnumbered decliners for a 4.96-to-1 ratio
on the NYSE and a 3.43-to-1 ratio on the Nasdaq.
The S&P index recorded seven new 52-week highs and 29 new
lows, while the Nasdaq recorded 70 new highs and seven new lows.
(Reporting by Bansari Mayur Kamdar and Aniruddha Ghosh in
Bengaluru; Editing by Shounak Dasgupta)