US STOCKS-Nasdaq ends higher after Twitter agrees to be bought by Musk

Silicon Motion Technology

25/04/2022 21:00

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    * Wall Street's fear gauge at its highest since mid-March
    * Twitter jumps after deal to be bought by Elon Musk
    * Beijing seen at risk of lockdown, cyclicals lead declines

 (Updates with end of session)
    By Bansari Mayur Kamdar and Noel Randewich
    April 25 (Reuters) - The Nasdaq ended sharply higher on
Monday, with growth stocks staging a late-day rally after
Twitter agreed to be bought by billionaire Elon Musk.
    Twitter  TWTR.N  surged after announcing it would be bought
by Musk in a deal that will shift control of the social media
giant to the world's richest person.  urn:newsml:reuters.com:*:nL2N2WN0TM
    The S&P 500 traded in negative territory for much of the
session but extended gains after Twitter's announcement.
    "I think it's just a confidence thing that, hey, there are
still people that are willing to pay ridiculous valuations for
some companies out there," said Dennis Dick, a trader at Bright
Trading LLC.
    Earlier, uncertainty reverberated across world markets, with
Chinese shares marking their biggest slump since a pandemic-led
selling in February 2020 and European stocks falling to their
lowest in over a month on fears of strict restrictions in China.
 MKTS/GLOB 
    The S&P energy index  .SPNY  dropped as Brent crude prices
 LCOc1  dropped almost 5% toward $100 a barrel.  O/R 
    Oil majors Chevron Corp  CVX.N  and ExxonMobil  XOM.N , and
oilfield services companies Schlumberger NV  SLB.N  and
Halliburton Co  HAL.N , also fell. 
    Google-owner Alphabet  GOOGL.O  rallied ahead of its
quarterly report after the bell on Tuesday. Microsoft  MSFT.O 
and Facebook owner Meta Platforms  FB.O  also gained.
    Nearly a third of S&P 500 index firms are due to report this
week. Of the 102 companies in the S&P 500 that posted earnings
so far, 77.5% reported above analysts' expectations, according
to Refinitiv data.
    "Earnings are going to be crucial to the mindset of the of
the average investor. The playbook was buy Apple, buy Netflix,
buy Google and throw away the key, but that playbook is no
longer working," said Jake Dollarhide, chief executive officer
at Longbow Asset Management. "What is the outlook for these
companies going to be?"
    The CBOE Volatility index  .VIX , known as Wall Street's
fear gauge, hit as high as 31.6 points, its highest level since
mid-March.
    Bleak results from pandemic darling Netflix  NFLX.O  along
with surging bond yields pummeled high-growth stocks last week,
bringing year-to-date losses in the tech-heavy Nasdaq  .IXIC  to
about 18%. 
    Traders are pricing in big moves by the Fed this year to
control inflation after a series of hawkish remarks from
policymakers. Fed Chair Jerome Powell last week gave a "go" sign
to a half-point rate hike in May and signaled he would be open
to "front-end loading" the U.S. central bank's retreat from
super-easy monetary policy.  urn:newsml:reuters.com:*:nL2N2WK1MC
    According to preliminary data, the S&P 500
 .SPX  gained 25.54 points, or 0.60%, to end at 4,297.32 points,
while the Nasdaq Composite  .IXIC  gained 166.98 points, or
1.30%, to 13,006.28. The Dow Jones Industrial Average
 .DJI  rose 251.80 points, or 0.74%, to 34,063.20.
    Silicon Motion Technology Corp  SIMO.O  jumped after a
report that the chipmaker is exploring a sale.  urn:newsml:reuters.com:*:nL3N2WN23X

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 (Reporting by Bansari Mayur Kamdar and Devik Jain in Bengaluru
and by Noel Randewich in Oakland California; Editing by Maju
Samuel and Aurora Ellis)
 ((noel.randewich@tr.com; Twitter: @randewich))