by Amruta Khandekar and Noel Randewich
May 16 (Reuters) – The S&P 500 ended lower on Monday on Wall Street, in the wake of Tesla and other growth stocks, hurt by the release of lackluster Chinese economic data that heightened fears of a slowdown world and a rise in interest rates.
China announced in the morning a sharper than expected drop in retail sales and an unexpected drop in industrial production in April due to the country’s restrictive measures against COVID-19.
Energy stocks have nevertheless benefited from investor confidence in a significant recovery in demand in China, due to signs that the coronavirus pandemic is receding in the most affected areas.
The S&P 500 energy index thus reached its highest level of 2014 during the day and was the best performing of the 11 sector indices.
The Dow Jones index closed up 0.08% at 32,223.42 points while the broader S&P-500 lost 0.39% to 4,008.02 points.
The Nasdaq Composite fell for its part by -1.20% to 11,662.79 points.
“After Friday’s big rally, people are looking around and wondering if this is going to last,” said Ross Mayfield, investment strategist at Baird in Louisville, Kentucky. “Does this look like a comeback or is there still something to purge?”
Many large-cap stocks ended lower, such as Amazon and Google-owner Alphabet, which weighed on the S&P 500 and Nasdaq.
Twitter deepened its losses after a report from Bloomberg that Elon Musk said a deal to buy the group for less than the previously agreed $44 billion was “not out of the question”.
Tesla stock, also led by Elon Musk, also fell.
Investors fear that the aggressive interest rate hikes decided by the US Federal Reserve to combat decades-high inflation could tip the economy into a recession.
The conflict in Ukraine, supply chain disruptions and pandemic-related lockdowns in China amplify the economic challenges.
(Reporting Amruta Khandekar and Devik Jain in Bangalore and Noel Randewich in San Francisco; with the contribution of Devik Jain in Bangalore, French version Jean-Michel Bélot)