S&P 500 in Rally Mode as Tech Continues Comeback By Investing.com

By Yasin Ebrahim

Investing.com – The S&P 500 rallied Monday as the comeback in tech and consumer discretionary stocks continued, led by gains in Tesla and Netflix ahead of busy week of quarterly earnings.

The rose 1.4%, the added 0.8%, or 2674 points, the Nasdaq gained 2.6%.

Tesla (NASDAQ:) rallied more than 10%, building on gains from last week — when the electric vehicle marker reported better-than-expected – after Credit Suisse (SIX:) Credit Suisse upgraded its outlook on the stock to buy from neutral, citing strong margins

“Tesla has surprised to the upside on margins, in large part driven by cost reductions; we believe the strong margins are sustainable,” Credit Suisse said in a note. “Strong margins are critical not only for EPS, but also as we expect Tesla to eventually use its margin strength + software standardization to spur volume growth”

Netflix (NASDAQ:) jumped more than 10% continuing to make up ground after its recent plunge after Citi upgraded stock to buy” from neutral, citing material subscriber growth prospects.

The return of investor appetite for growth sectors of the market followed stellar earnings by big tech stocks last week including Apple (NASDAQ:) and Microsoft (NASDAQ:) that helped ease worries about an increasingly hawkish Federal Reserve.

“Fingers point to the Fed as a main instigator of last week’s market turmoil, and our suspicion is that traders and investors will remain hypersensitive to any further developments on this front over the short-run,” Janney Montgomery Scott said.

NXP Semiconductors (NASDAQ:) will kick off another big week of quarterly earnings for tech stocks with results after the closing bell. That will be followed by Advanced Micro Devices, Google-parent Alphabet and Facebook-parent Meta Platforms and Amazon later in the week.

Cyclicals sectors including financials and energy lagged the broader market, though the latter was supported by an ongoing melt-up in oil prices.

“Today it is above all the concerns about supply outages in connection with the Ukraine crisis that keep pushing prices ever further up,” Commerzbank said in a note.

Marathon Petroleum (NYSE:), however, bucked the trend higher in energy stocks, on concerns about prolinged disrupitions ahead after Reuters reported that the United Steelworkers Union had rejected a contract offer from company. 

In other news, Beyond Meat (NASDAQ:) surged more than 14% after Barclays (LON:) upgraded its rating on the plant-based meat company to overweight from “underweight, and raised its price target on the stock to $80 per share from $70.

Sony (NYSE:), meanwhile, said it would be acquiring video game developer Bungie in a $3.6 billion deal.

The move from Sony comes just a week after Microsoft recently snapped up ATVI for about $70 billion.