S&P 500 climbs as dip buyers pile into growth stocks following recent rout

By Yasin Ebrahim

Investing.com -- The S&P 500 climbed Monday, attempting to put its worst week of the year in the rearview mirror as growth stocks including tech were scooped up by dip buyers even as fears about a more hawkish Federal Reserve persist.

The S&P 500 was up 0.55%, the Dow Jones Industrial Average rose 0.42%, or 136 points, the Nasdaq Composite gained 0.91%.

Tesla (NASDAQ:TSLA) led the gains in consumer discretionary as investors looked ahead to the electric vehicle maker’s investor day on Wednesday.

“We expect the company to introduce Master Plan 3 and present the main drivers of its longer-term growth strategy, and in particular its 3rd generation vehicle platform which could support multiple future vehicles and segments at a lower price point,” Deutsche Bank said.

In other EV news, Fisker (NYSE:FSR) surged 30% as its unchanged vehicle production guidance for 2023 overshadowed quarterly results that were worse than feared.

Tech stocks also attracted dip-buyers following a recent rout, with Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) in positive territory. Meta Platforms Inc (NASDAQ:META) was the exception, trading just below the flatline.

Despite the somewhat flawed launch of its AI chatbot Bard, Google download activity isn’t showing any sign of slowing at a time when the uptick in Microsoft Bing downloads continues to be driven by the integration of ChatGPT.

"However, the uptick in Bing downloads has not impacted Google download activity, which has been stable in January and February, and we are not aware of any slowing in Google search revenues that could be attributed to the late-2022 ChatGPT launch," Bank of America said in a note.

Growth stocks were also supported by easing Treasury yields following a surge in recent weeks amid concerns about higher Fed rate hikes.

Economic data, meanwhile, showed durable goods fell more than expected, but a deeper dive into the details pointed to ongoing strength in the economy.

“While headline [durable goods] orders continue to disappoint, the underlying details suggest business investment improved somewhat at the start of the year, adding to the list of indicators painting the U.S. economy as steady,” Stifel said in a note.

In deal news, Pfizer (NYSE:PFE) reportedly is in early talks to acquire cancer drugmaker Seagen (NASDAQ:SGEN) -- a move that would provide a much-needed boost the Pfizer’s oncology business. Seagen jumped more than 10%.