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S&P 500 cuts losses as easing Treasury yields lift tech

Published 02/15/2023, 02:08 PM
Updated 02/15/2023, 02:39 PM
© Reuters.
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By Yasin Ebrahim

Investing.com -- The S&P 500 cut the bulk of losses Wednesday as tech strength emerged after Treasury yields retreated despite signs of a stronger consumer fueling fears for more Federal Reserve rate hikes.

The S&P 500 rose 0.1%, the Dow Jones Industrial Average fell 0.03%, or 89 points, the Nasdaq was up 0.69%

Retail sales rose 3% last month, beating economists’ forecast for a 1.8% increase. The retail sales control group – which is filtered into U.S. GDP – climbed 1.7 %, well above forecasts for a 0.8% rise.

The blowout retail sales report – led by pent-up demand for autos, pointed to a strong consumer, which makes up about two-thirds of economic growth – added to fears about a more aggressive Fed. 

Following an intraday jump, Treasury yields retreated and supported growth sectors of the market.

Apple (NASDAQ:AAPL) and Alphabet (NASDAQ:GOOGL) were the big gainers in the tech, while in semiconductors investors weighed a decline in Taiwan Semiconductor Manufacturing (NYSE:TSM) and a surge in Analog Devices .

Berkshire Hathaway (NYSE:BRKa) cut its stake in Taiwan Semi by 86%, sending the latter’s share price more than 5% lower.

Analog Devices (NASDAQ:ADI) jumped 6% to a 52-week high after reporting quarterly results that topped Wall Street estimates on both the top and bottom lines.

Roblox (NYSE:RBLX) was a winner on the earnings front, surging 25% as the video game company reported better-than-expected fourth-quarter results, driven by a jump in bookings.

“The company produced healthy DAU growth across all regions (with solid engagement trends) and solid bookings/revenue trends as the company believes investments in innovation are now yielding output,” Goldman Sachs said in a note.

Airbnb (NASDAQ:ABNB), meanwhile, delivered upbeat guidance after quarterly results beat estimates on both the top and bottom lines as a healthy demand for travel underpinned bookings.

“The story to us here is that this high-quality company is getting large credit for strong execution amplified by a confluence of additional tailwinds,” RBC said as it lifted its price target on the stock to $135 from $110 a share.

Energy was a drag on the broader market, falling nearly 3%, driven by a slump in Devon Energy pressured by a slump in oil prices following a much larger than expected build in U.S. weekly crude stockpiles.

U.S. crude stockpiles rose by 16.3 million barrels last week to 471.4M barrels, well above expectations of 1.2M barrels.

Devon Energy (NYSE:DVN) fell 11% after its fourth-quarter results missed expectations and the energy company projected capital expenditure of $3.6 billion to $3.8B, above estimates for $3.42B.

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