Stocks rose on Monday as gains in shares of chipmakers helped ease pressure on the battered technology sector at the start of another big week for corporate earnings.
The Dow Jones Industrial Average jumped 307 points, or 0.9%, to 33,675, the S&P 500 climbed 1.2% and the Nasdaq was up 1.8%.
Investors are eyeing results from Microsoft, Tesla, IBM and Intel this week to see how their business are coping with the threat of an economic slowdown triggered by the Federal Reserve’s aggressive policy tightening.
“All those names and sectors (chipmakers) in general just got beat up much more than the market in general overall. So now in a lot of those names, there’s value,” said Jimmy Lee, chief executive officer of Wealth Consulting Group.
“It was a tough year for technology investors. So you’re starting to see investors going back into some of those names. But instead of across the board, they’ll be buying the names that have a chance to do good this year, even in a choppy economic environment.”
Analysts now expect fourth-quarter earnings from S&P 500 companies to fall 2.9%, according to IBES Refinitiv data, compared with a 1.6% drop at the beginning of the year.
Investors are also awaiting January manufacturing and fourth-quarter GDP data to assess the impact of the Fed’s rate hikes on the economy.
Although recent data has signaled cooling inflation, a tight labor market may keep the central bank on its aggressive policy tightening path until rates rise over 5%, a level backed by most policymakers.
Cloud-based software firm Salesforce rose 2% to lead gains among Dow components after activist investor Elliott Management made a multi-billion-dollar investment in the company, according to people familiar with the matter.