US STOCKS-Nasdaq boosted by Tesla, rate hike worries linger

Reuters

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      Tesla gains on plans to raise production
    

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      Major indexes set for third straight quarterly decline
    

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      Nike slumps on margin warning, drags athletic gear makers
    

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      Dow down 0.36%, S&P flat, Nasdaq up 0.32%
    

  
 (Updates prices through out, updates comments)
    By Ankika Biswas and Shreyashi Sanyal
       Sept 30 (Reuters) - The Nasdaq index rose on Friday as
Tesla gained on its plans to sharply increase production, even
though resilient core inflation added to worries of big
interest-rate hikes denting a rise in consumer spending.  
    Shares of the electric-vehicle maker  TSLA.O  gained 1.04%
after Reuters reported its plans to push global production of
its top-selling vehicles in the fourth quarter.  urn:newsml:reuters.com:*:nL1N3110HJ
    Other growth stocks also got a boost from a dip in the
benchmark 10-year Treasury yield  US10YT=RR  to a week's low of
3.682%, with Meta Platforms  META.O , Alphabet Inc  GOOGL.O  and
Amazon.com Inc  AMZN.O , gaining between 0.1% and 1.7%.
    Data showed the core personal consumption expenditures price
index jumped 0.6% after being unchanged in July. It climbed 4.9%
on a year-on-year basis in August after increasing 4.7% in July.
 urn:newsml:reuters.com:*:nL1N31115S
    "Inflation is running hotter than expected, so the Fed is
going to have to continue to act and probably be more aggressive
than they would like to," said Brian Klimke, director of
investment research at Cetera Financial Group.
    Fed funds futures showed traders see a nearly 66% chance of
the U.S. central bank raising rates by 75 basis points at its
November meeting, up from 61% odds before the inflation data.
 urn:newsml:reuters.com:*:nL1N31115W
    The Federal Reserve's aggressive stance on interest-rate
hikes have pushed all the three major indexes into bear market
and set them for their third straight quarterly decline.
   The Dow Jones Industrial Average  .DJI  was set for its worst
month since pandemic lows. The S&P 500  .SPX  has slumped 8.2%
so far in September, testing its lowest level since November
2020, while the Nasdaq  .IXIC  has lost over 9% during the
month.
    "Month-end portfolio rebalances and expiration of quarterly
option strategies should act in support of the market today,"
said J.P. Morgan's Chief Global Markets Strategist Marko
Kolanovic in a note.
    Nike Inc  NKE.N  slid 11.74% as it warned of tightening
margins, fueling concerns of an industry-wide drop in profit due
to an inflation-induced hit to consumer sentiment.  urn:newsml:reuters.com:*:nL4N3112WI
 urn:newsml:reuters.com:*:nL4N3103WB 
    Shares of Under Armour  UAA.N  slipped 6.04%, while footwear
retailer Foot Locker Inc  FL.N  dropped 1.96%.
    Lower-than-expected quarterly revenue from Carnival Corp
 CCL.N  sent its shares plunging 20.91%, highlighting that
soaring prices forced consumers to cut discretionary spending
such as cruise travel.  urn:newsml:reuters.com:*:nL4N31137I
    Fed Vice Chair Lael Brainard, San Francisco Federal Reserve
Bank President Mary Daly, and Richmond President Thomas Barkin
backed the tough measures to bring down high inflation, with
Brainard warning against premature rate cuts.  urn:newsml:reuters.com:*:nW1N30E01I
 urn:newsml:reuters.com:*:nS0N30D03H urn:newsml:reuters.com:*:nFWN30D1HX
    However, Richmond Fed president Thomas Barkin said there are
"promising signs" inflation pressures have begun to ease though
it may take time be seen in the data.  urn:newsml:reuters.com:*:nL1N3111YR
    At 12:34 p.m. ET, the Dow Jones Industrial Average  .DJI 
was down 105.94 points, or 0.36%, at 29,119.67, the S&P 500
 .SPX  was down 0.15 points, or 0.00%, at 3,640.32, and the
Nasdaq Composite  .IXIC  was up 34.87 points, or 0.32%, at
10,772.38.
    For the third quarter, S&P 500 companies are expected to to
show an earnings growth of 4.5%, according to Refinitiv data,
down from prior expectations of 11.1% growth in July.
    Advancing issues outnumbered decliners by a 1.87-to-1 ratio
on the NYSE and by a 2.27-to-1 ratio on the Nasdaq.
    The S&P index recorded no new 52-week high and 52 new lows,
while the Nasdaq recorded 15 new highs and 205 new lows.
 (Reporting by Ankika Biswas and Shreyashi Sanyal in Bengaluru;
Additional reporting by Bansari Mayur Kamdar; Editing by Arun
Koyyur)
 ((Ankika.Biswas@thomsonreuters.com;))

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