By Yasin Ebrahim
Investing.com – The Dow cut losses to close higher Monday as dip-buying in tech stocks ahead of a crucial week of quarterly results for big tech steadied the broader market just as global growth worries returned.
The Dow Jones Industrial Average gained 0.64%, or 238 points, after falling by 488 points intraday. The S&P 500 was up 0.64%, and the Nasdaq climbed 1.3%.
Big tech sparked a broader market turnaround, led by gains in Google-parent Alphabet (NASDAQ:GOOGL), and Microsoft (NASDAQ:MSFT ahead of their quarterly results expected Tuesday.
Amazon (NASDAQ:AMZN), Meta (NASDAQ:FB), and Apple (NASDAQ:AAPL) also cut losses to end the day above 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 a 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:TWTR), meanwhile, continued to hog the limelight. In the afternoon it announced it had accepted a take-private offer from Tesla (NASDAQ:TSLA) chief executive Elon Musk, who offered $54.20 per share. Twitter announces quarterly results on Thursday.
Global growth concerns 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 3%, on fears that a lockdown in China could sap demand. Bloomberg reported, citing unnamed sources, that demand for gasoline, diesel and aviation fuels in China could drop by 20% year-on-year in April.
Schlumberger NV (NYSE:SLB), Halliburton (NYSE:HAL), and Baker Hughes (NASDAQ:BKR) were among the biggest decliners in the energy sector.
On the earnings front, meanwhile, Activision Blizzard (NASDAQ:ATVI) 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 as selling conditions haven't yet reached extreme levels.
“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.
In other news, Match (NASDAQ:MTCH) rose more than 5% as rumors swirled the dating services company could be a potential target for Meta Platforms.