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Tesla down as Q3 deliveries miss market estimates
U.S. factory activity slowest in ~2.5 years in Sept -ISM
Credit Suisse, Citi cut 2022 year-end target for S&P 500
Indexes up: Dow 1.55%, S&P 1.53%, Nasdaq 1.20%
(Updates prices to open; adds details)
By Ankika Biswas and Bansari Mayur Kamdar
Oct 3 (Reuters) - U.S. stock indexes rose on Monday after sharp declines last week although losses in Tesla Inc capped the gains on the Nasdaq after the world's most valuable electric-vehicle maker missed quarterly delivery targets.
Ten of the 11 major S&P 500 sectors advanced in early trading, with the energy sector leading gains. Megacap growth and technology companies such as Apple and Microsoft also advanced 1.5% each.
"We could see a rebound in the beginning of the quarter simply due to the low sentiment and the lows that were reached at the tail-end of the last quarter," said Jason Pride, chief investment officer for private wealth at Glenmede in Philadelphia.
All three major indexes ended a volatile third quarter lower on Friday on growing fears that the Federal Reserve's aggressive monetary policy will tip the economy into recession.
"We suspect during the quarter it is going to become more apparent that we are getting closer to a recession as the Fed continues to increase rates and that should probably keep the market closer to, if not below, the lows that it is already at."
Meanwhile, major automakers are expected to report modest declines in U.S. new vehicle sales, but analysts and investors are concerned that a darkening economic picture, not inventory shortages, will lead to a drop in future car sales.
Tesla Inc fell 7% after it sold fewer-than-expected vehicles in the third quarter as deliveries lagged way behind production due to logistic hurdles. Peers Lucid Group fell 2% and Rivian Automotive 3.9%.
Oil majors Exxon Mobil and Chevron Corp rose more than 3%, tracking a jump in crude prices as sources said the Organization of the Petroleum Exporting Countries and its allies are considering their biggest output cut since the start of the COVID-19 pandemic.
At 10:04 a.m. ET, the Dow Jones Industrial Average was up 445.72 points, or 1.55%, at 29,171.23, the S&P 500 was up 54.78 points, or 1.53%, at 3,640.40, and the Nasdaq Composite was up 127.33 points, or 1.20%, at 10,702.95.
Data showed global factory output mostly weakened in September as slowing demand added to the pain from persistent cost pressures and tighter monetary policy, diminishing economic recovery prospects.
In the United States, manufacturing activity grew at its slowest pace in nearly 2-1/2 years in September as new orders contracted, likely as rising interest rates to tame inflation cooled demand for goods.
Credit Suisse and Citigroup became the latest brokerages to bring down their 2022 year-end targets for the S&P 500 index, as U.S. equity markets bear the heat of aggressive central bank actions to tamp down inflation.
Credit Suisse also set a 2023 year-end price target for the benchmark index at 4,050 points, adding that 2023 would be a "year of weak, non-recessionary growth and falling inflation."
Advancing issues outnumbered decliners by a 4.49-to-1 ratio on the NYSE and a 2.43-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week highs and 23 new lows, while the Nasdaq recorded 37 new highs and 177 new lows. (Reporting by Ankika Biswas and Bansari Mayur Kamdar in Bengaluru; Editing by Anil D'Silva and Arun Koyyur)