By Shreyashi Sanyal and Bansari Mayur Kamdar
(Reuters) - Wall Street's main indexes rose on Tuesday, boosted by Nike and Micron following strong earnings, with beaten down technology stocks bouncing back from the previous day's sharp selloff.
A rapidly spreading Omicron variant of the coronavirus has rattled stock markets around the world, triggering major routs in the final month of the year due to worries about the strain's impact on global economic recovery.
Nike Inc (NYSE:NKE) rose 6.5%, leading gains among Dow components. It beat quarterly estimates for profit and revenue, and sounded confident of a letup in supply chain problems in its next fiscal year.
Micron Technology Inc (NASDAQ:MU) led the advance among chipmakers, with a jump of 9.9%, after it forecast upbeat second-quarter earnings and topped Wall Street expectations for quarterly profit and revenue.
Their positive updates helped allay some concerns about broader supply chain constraints in a high inflation environment, which has become a cause for concern for central banks globally.
Ten of the 11 major S&P 500 sectors rose in early trading, while the Philadelphia SE Semiconductor index gained 1.6%.
"We got oversold yesterday and we are bouncing back a little bit today. This market is more a dead cat bounce as opposed to this new bull market that is going to rage into 2022. There are just too many concerns," said Dennis Dick, a proprietary trader at Bright Trading LLC in Las Vegas.
Mega-cap growth firms, including Tesla Inc (NASDAQ:TSLA), Microsoft Corp (NASDAQ:MSFT), Apple Inc (NASDAQ:AAPL), Amazon.com Inc (NASDAQ:AMZN), and Alphabet (NASDAQ:GOOGL) Inc, rose between 0.2% and 1.3% after taking a beating on Monday.
Investors have taken a more defensive stance this month, with sectors such as consumer staples, real estate and utilities among top gainers in December. Most of the defensive plays made little gains on Tuesday.
"For the next year, one thing to consider is the January effect — the buying of beaten down names. What you see right now is tax-selling of all these growth names... That abates after the new year, and sometimes beaten down dogs of 2021 might actually become leaders in 2022," Dick said.
At 9:46 a.m. ET the Dow Jones Industrial Average was up 295.40 points, or 0.85%, at 35,227.56, the S&P 500 was up 30.23 points, or 0.66%, at 4,598.25 and the Nasdaq Composite was up 105.13 points, or 0.70%, at 15,086.08.
Travel-related stocks, which fell in the previous session on the prospect of tighter curbs, rose on Tuesday. Delta Air Lines Inc (NYSE:DAL) added 3.2% to lead gains among U.S. carriers, while Wynn Resorts (NASDAQ:WYNN) gained 2.7%.
General Mills Inc (NYSE:GIS) slipped 4.3% after missing analysts estimates for quarterly profit.
Advancing issues outnumbered decliners by a 6.01-to-1 ratio on the NYSE and by a 3.28-to-1 ratio on the Nasdaq. The S&P index recorded six new 52-week highs and no new low, while the Nasdaq recorded 14 new highs and 31 new lows.