By Yasin Ebrahim
Investing.com – The S&P 500 turned positive Monday despite worries about a global economic slowdown as investors piled into beaten down stocks ahead of a crucial week of quarterly results for big tech.
The was up 0.03%, the added 0.27%, or 90 points, the Nasdaq jumped 1.8%.
Big tech moved off its worst levels of the day to help steady, led by gains in Google-parent Alphabet (NASDAQ:), and Microsoft (NASDAQ: ahead of their quarterly results expected Tuesday.
Amazon (NASDAQ:), and Meta (NASDAQ:), Apple (NASDAQ:) also cut losses, though the latter remained in slightly under the flatline.
These five megacap stocks, which account for more than a quarter of the weighting of the S&P 500 index, need to deliver quarterly results that drown out the fears of global slowdown.
“In a nutshell, the Street needs to see the fundamental drivers in play on the cloud, enterprise, and consumer front to show the ‘feared slowdown’ is more bark than bite at this point in the cycle,” Wedbush said Monday.
Twitter (NYSE:), meanwhile, continued to hog the limelight. In the afternoon it announced it had accepted a take-private offer from Tesla (NASDAQ:) chief executive Elon Musk, who offered $54.20 per share. Twitter announces quarterly results on Thursday.
Stocks started the week on the back foot after as global growth concerned resurfaced on fears that rising Covid-19 cases in China could spark another lockdown in the world’s second largest economy.
Energy stocks bore the brunt of the pressure, down more than 2%, on fears that a lockdown in China could sap demand. Bloomberg reported, citing unknown sources, that demand for gasoline, diesel and aviation fuels in China could drop by 20% year-on-year in April.
Schlumberger NV (NYSE:), Halliburton (NYSE:), and Baker Hughes (NASDAQ:) were among the biggest decliners in the energy sector.
Financials, meanwhile were also nursing losses, paced by a decline in bank stocks as Treasury yields took a breather from their recent melt-up.
On the earnings front, meanwhile, Activision Blizzard (NASDAQ:) was down less than 1% after first-quarter revenue fell short of Wall Street expectations amid weaker than expected demand for its “Call of Duty: Warzone.”
Despite the rebound, some on Wall Street said there is still likely more downside ahead.
“We do not see the daily, weekly, or monthly charts as necessarily ‘oversold’ at this point- which implies there is likely more downside ahead before current selling conditions hit extremes,” Janney Montgomery Scott said in a note.