By Devik Jain and Bansari Mayur Kamdar
(Reuters) -Wall Street’s main indexes reversed course to move higher on Friday, propelled by gains in Apple and Visa, at the end of a week marked by wild gyrations on worries about aggressive rate hikes by the Federal Reserve and geopolitical tensions.
Apple Inc shares jumped 5.7% after the iPhone maker reported blockbuster results and teased its metaverse ambitions. The stock was the single biggest contributor to the rally on the Nasdaq and the S&P 500.
Visa surged 8.3% after beating quarterly estimates as more international travel and e-commerce drove an increase in spending volumes.
Six of the 11 major S&P sectors advanced, with technology sector jumping more than 2.6%.
“The Apple growth story is plowing straight ahead and supply chain improvements potentially on the horizon is a major bullish data point not just for Apple, but the entire tech sector to digest this morning,” said Wedbush Securities analyst Daniel Ives.
Meanwhile, Russian President Vladimir Putin said on Friday the United States and NATO had not addressed Moscow’s main security demands in their standoff over Ukraine but that it was ready to keep talking.
The benchmark index tumbled as much as 10.5% earlier in the session from its record closing high reached on Jan. 3, flirting with a correction for fifth time this week.
The Russell 2000 edged 0.3% higher, but the small-cap index was still down over 20% to be in a bear market.
“It looks like we’re in for a bumpy ride and whether or not we close up on the plus side is irrelevant because the market volatility is likely to continue,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
“If we begin to see inflation moderate a bit, then the yields may actually begin to work their way lower. And so that means that perhaps an overly aggressive move by the Fed may not be necessary now.”
Data on Friday showed core personal consumption expenditure price index, the Federal Reserve’s preferred gauge for inflation, rose 0.5% in December, in line with expectations. Wage inflation was also building up amid an acute shortage of workers.
At 12:29 p.m. ET, the Dow Jones Industrial Average was up 114.47 points, or 0.34%, at 34,275.25, the S&P 500 was up 43.55 points, or 1.01%, at 4,370.06, and the Nasdaq Composite was up 216.98 points, or 1.62%, at 13,569.76.
The S&P 500 still tracked its fourth straight weekly fall, its longest losing streak since Sept 2020 and on course for its worst monthly performance since March 2020.
Traders and big banks raised their bets to nearly five interest rate rises by December after the Federal Reserve hinted at a hike in March and warned of persistent inflation.
Fourth-quarter earnings season has been mixed so far. Of the 168 companies in the S&P 500 that have reported earnings, 77.4% beat profit expectations, according to Refinitiv data.
Caterpillar Inc fell 6.1% after warning of margin pressure from higher production and labor costs, while Chevron Corp slipped 4.3% on downbeat fourth-quarter profit.
Advancing issues outnumbered decliners by a 1.00-to-1 ratio on the NYSE and by a 1.31-to-1 ratio on the Nasdaq.
The S&P index recorded four new 52-week highs and 24 new lows, while the Nasdaq recorded 10 new highs and 701 new lows.
(Reporting by Devik Jain and Bansari Mayur Kamdar in Bengaluru; Editing by Arun Koyyur and Sriraj Kalluvila)