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

Silicon Motion Technology

25/04/2022 21:30

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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
    * Indexes: Dow +0.70%, S&P 500 +0.57%, Nasdaq +1.29%      

 (Updates following end off session, adds stock moves)
    By Bansari Mayur Kamdar and Noel Randewich
    April 25 (Reuters) - Wall Street rose on Monday, with the
Nasdaq ending sharply higher after Twitter agreed to be bought
by billionaire Elon Musk, sparking a late day rally in growth
stocks.
    Twitter  TWTR.N  ended up 5.6% 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. The S&P
500 growth index  .IGX  ended up over 1%, also bouncing back
from an earlier decline.
    "You can tell growth wanted to rally all day but the market
was holding it down. The Twitter news came and that was just a
green light to start buying some of the growth names. They have
been oversold for a while," 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 3.3% as Brent crude
prices  LCOc1  dropped almost 5% toward $100 a barrel.  O/R 
    Oil majors Chevron Corp  CVX.N  and ExxonMobil  XOM.N 
declined more than 2%, and oilfield services companies
Schlumberger NV  SLB.N  and Halliburton Co  HAL.N  also fell
more than 6%. 
    Google-owner Alphabet  GOOGL.O  rallied 2.9% 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 Dow Jones Industrial Average  .DJI  rose 0.7% to end at
34,049.46 points, while the S&P 500  .SPX  gained 0.57% to
4,296.12. 
    The Nasdaq Composite  .IXIC  climbed 1.29% to 13,004.85.
    
    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
    Silicon Motion Technology Corp  SIMO.O  jumped almost
13%after a report that the chipmaker is exploring a sale.
 urn:newsml:reuters.com:*:nL3N2WN23X
    Volume on U.S. exchanges was 12.8 billion shares, compared
with the 12.7 billion average for the full session over the last
20 trading days.
    Declining issues outnumbered advancing ones on the NYSE by a
1.19-to-1 ratio; on Nasdaq, a 1.21-to-1 ratio favored advancers.
    The S&P 500 posted 2 new 52-week highs and 50 new lows; the
Nasdaq Composite recorded 26 new highs and 493 new lows.  

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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))