US STOCKS-Wall Street rebounds as growth stocks rally; Twitter falls

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By Devik Jain and Medha Singh

June 6 (Reuters) – U.S. stock indexes on Monday regained some ground lost last week as investors bought into heavyweights Apple and Amazon.com, while Twitter dropped after Elon Musk threatened to walk away from his $44 billion buyout deal.

Ten of the 11 major S&P sectors advanced in early trading, with communication services .SPLRCL and financials .SPSY leading the pack with a rise of 2% and 1.8%, respectively. The energy sector .SPNY bucked the trend to retreat 0.5%.

Apple Inc AAPL.O, Tesla Inc TSLA.O, Alphabet Inc GOOGL.O and Amazon.com AMZN.O climbed between 1.9% and 3.8%. Amazon shares were trading after adjusting to 20-to-1 split.

The gains came after a bruising Friday when a solid jobs report quashed hopes of a pause in the Federal Reserve’s aggressive policy-tightening plan to cool decades-high inflation.

“I do not see a lot of positive catalysts at the moment. We are just basically back to standard volatility, where you have got a big up day followed by a big down day and back and forth on that,” said Randy Frederick, managing director of trading and derivatives for Charles Schwab.

“Right now, we do not really know whether or not the market can handle the interest rate hikes. It is probably prudent to remain cautious and be very careful if you are going to buy any dip days or even try to catch any momentum moves to the upside.”

All eyes will be on the U.S. consumer price index report later this week for more clues on the path of future interest rate hikes. Signs that inflation remains strong could spook markets already battered by worries that a hawkish Fed could tip the economy into a recession. nL1N2XQ1RL

Money markets are fully pricing in 50 basis point increases by the U.S. central bank next week and in July. FEDWATCH

The upbeat mood on Monday was also underpinned by optimism around easing regulatory crackdowns in China and signs of Beijing and Shanghai returning to normal life after the country’s biggest COVID-19 outbreak in two years.

Didi Global Inc DIDI.N surged 50% after a report that Chinese regulators were preparing as early as this week to allow the ride-hailing firm’s mobile app back on domestic app stores. nL4N2XT1GW

Shares of JD.com Inc JD.O, Baidu BIDU.O and Alibaba Group BABA.N, all targets of China’s crackdown on internet companies, gained between 3.6% and 8.9%.

At 10:20 a.m. ET, the Dow Jones Industrial Average .DJI was up 320.99 points, or 0.98%, at 33,220.69, the S&P 500 .SPX was up 53.65 points, or 1.31%, at 4,162.19, and the Nasdaq Composite .IXIC was up 195.96 points, or 1.63%, at 12,208.69.

Twitter Inc TWTR.K slipped 3.9% after billionaire Musk said he might walk away from his buyout offer if the social media company fails to provide data on spam and fake accounts. nL4N2XT2CA

Advancing issues outnumbered decliners by a 2.58-to-1 ratio on the NYSE and a 1.65-to-1 ratio on the Nasdaq.

The S&P index recorded one new 52-week high and 29 new lows, while the Nasdaq recorded 45 new highs and 47 new lows.

(Reporting by Medha Singh, Susan Mathew and Devik Jain in Bengaluru, additional reporting by Tom Westbrook in Singapore; editing by Aditya Soni)

((Medha.Singh@thomsonreuters.com; +91 80 6210 0592; Twitter: https://twitter.com/medhasinghs;))