US STOCKS-Wall Street rallies at end of roller coaster week

BY Reuters | ECONOMIC | 05/13/22 02:23 PM EDT

(For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window.)

* Twitter drops as Musk puts purchase deal on hold

* All major indexes on course for steep weekly losses

* Indexes up: Dow 0.5%, S&P 1.38%, Nasdaq 2.67% (New throughout, updates prices, market activity and comments; new byline, adds NEW YORK dateline)

By Stephen Culp

NEW YORK, May 13 (Reuters) - Wall Street rallied on Friday, ending a week of wild market gyrations marked by signs of peaking inflation and worries that the Federal Reserve might tighten policy too aggressively.

Rebounding megacap tech and tech-adjacent growth stocks led the market higher. These shares thrived when interest rates were low and Fed policy accommodative during the pandemic, but they sold off in recent sessions.

Despite the gains, the S&P 500 and the Nasdaq were on course to post their sixth consecutive weekly loss. It would be the longest losing streak for the S&P 500 since fall 2012 and for the Nasdaq since spring 2011.

The Dow was on course for its seventh consecutive weekly dip, the blue chip average's longest losing streak since late winter of 1980.

"It's a pretty bleak past couple of months, we're at or very close to bear market territory for just about every major index," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. "It's too early to tell whether we're approaching a bottom and at least stabilizing."

In the past six trading days, the Labor Department delivered four economic reports suggesting inflation hit its apex in March, welcome news for market participants worried that the Fed's upcoming spate of inflation-fighting interest rate hikes could spark a recession.

Fed Chairman Jerome Powell, confirmed on Thursday by the U.S. Senate to a second term, reiterated the central bank's determination to battle inflation, but said he believes the economy can avoid a serious downturn.

Powell "demonstrated a humility and seriousness at the same time," Tuz said. "He's committing to getting this inflation under control, even if he admits it's going to be somewhat painful."

The Dow Jones Industrial Average rose 160.15 points, or 0.5%, to 31,890.45, the S&P 500 gained 54.19 points, or 1.38%, to 3,984.27 and the Nasdaq Composite added 303.40 points, or 2.67%, to 11,674.36.

Among the 11 major sectors of the S&P 500, consumer discretionary stocks enjoyed the largest percentage gain.

First-quarter reporting season has reached the final stretch, with 458 companies in the S&P 500 having reported. Of those, 78% have delivered consensus beating results, according to Refinitiv.

For the first three months of the year, analysts now see aggregate year-on-year S&P 500 earnings growth of 11.1%, up from 6.4% at quarter-end, per Refinitiv.

Shares of Twitter Inc (TWTR) dropped 9.8% following Elon Musk's tweet that he had put the $44 billion cash buyout deal on hold, as he waits for the social media company to provide data on fake accounts.

Tesla Inc (TSLA) jumped 4.9%.

Trading platform Robinhood Markets Inc (HOOD) surged 23.0% after Samuel Bankman-Fried, the chief executive and founder of cryptocurrency exchange FTX, revealed a 7.6% stake in the brokerage app company.

Warren Buffett's Berkshire Hathaway (BRK/A) disclosed buying more shares of Occidental Petroleum (OXY), sending the oil company's shares up 6.2%.

Advancing issues outnumbered declining ones on the NYSE by a 3.37-to-1 ratio; on Nasdaq, a 2.94-to-1 ratio favored advancers.

The S&P 500 posted one new 52-week high and 30 new lows; the Nasdaq Composite recorded nine new highs and 257 new lows. (Reporting by Stephen Culp; additional reporting by Devik Jain, Bansari Mayur Kamdar in Bengaluru; Editing by David Gregorio)

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Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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