By Shreyashi Sanyal and Devik Jain
(Reuters) – The S&P 500 and the Nasdaq rose on Tuesday, led by a bounce in Amazon.com, while a likely delay in the passage of new fiscal stimulus by Congress dampened hopes of a faster economic recovery from the coronavirus pandemic and kept the Dow subdued.
Amazon.com Inc <AMZN.O> jumped 4.0% after Bernstein upgraded its stock to “outperform”, saying the company will continue to receive a boost from premium subscribers and third-party merchants even beyond the pandemic.
Microsoft Corp <MSFT.O>, Apple Inc <AAPL.O>, Alphabet Inc <GOOGL.O> and Facebook Inc <FB.O>, which together fuelled a Wall Street rally since a coronavirus-driven crash in March, rose between 0.3% and 2%.
“The market is looking for some stability. Once again investors and traders are going to look to names that had gotten unduly beaten up,” said Kenny Polcari, managing partner at Kace Capital Advisors in Boca Raton, Florida.
Seven of the 11 major S&P 500 indexes were trading higher, with real estate <.SPLRCR> and consumer discretionary <.SPLRCD> leading gains.
U.S. stocks started the week on the back foot as fears about a new round of lockdowns in Europe and a stalemate in Congress over the size and shape of another coronavirus-response bill dented hopes of a swift economic recovery.
On Monday, the benchmark S&P 500 <.SPX> ended just under 9% down from its record high on Sept. 2, floating above correction territory.
Investors are now bracing for an extended period of market volatility on concerns over growing political uncertainty in Washington that have been sharpened by the death of Supreme Court Justice Ruth Bader Ginsburg.
“All the political energies are going to be directed towards the next Supreme Court nomination. I don’t see them paying attention to that and pushing stimulus through at the same time,” said Mike Zigmont, head of trading and research at Harvest Volatility Management in New York.
Federal Reserve Chair Jerome Powell on Tuesday told a congressional panel that America’s economy had shown “marked improvement” since the coronavirus pandemic drove it into recession, but the path ahead remains uncertain and the U.S. central bank will do more if needed.
Chicago Fed President Charles Evans also warned that the U.S. economy risks a longer, slower recovery, if not another outright recession, if Congress fails to pass a fiscal package.
At 12:34 p.m. ET, the Dow Jones Industrial Average <.DJI> was down 24.28 points, or 0.09%, at 27,123.42, the S&P 500 <.SPX> was up 11.84 points, or 0.36%, at 3,292.90 and the Nasdaq Composite <.IXIC> was up 73.13 points, or 0.68%, at 10,851.93.
Tesla Inc <TSLA.O> fell 5.1% after Chief Executive Officer Elon Musk warned about the difficulties of speeding up production as an expert cautioned the carmaker’s increased reliance on large-scale aluminium parts could bring new manufacturing challenges.
Oracle Corp <ORCL.N> shed 1.8% on report that Beijing was unlikely to approve a proposed deal by the software maker and Walmart <WMT.N> for ByteDance’s TikTok.
Declining issues outnumbered advancers for a 1.14-to-1 ratio on the NYSE and for a 1.50-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week high and no new low, while the Nasdaq recorded 19 new highs and 41 new lows.
(Reporting by Shreyashi Sanyal and Devik Jain in Bengaluru; Editing by Anil D’Silva and Maju Samuel)
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