Wall Street Set to Rebound After Sharp Selloff as Nike, Micron Lead Gains

By Reuters
December 21, 2021 Updated: December 21, 2021

Wall Street’s main indexes were set to rise on Tuesday, following a steep selloff in the previous session, as strong quarterly earnings from Nike and a positive forecast from chipmaker Micron helped lift sentiment.

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.

Shares of Nike Inc. rose 4.0 percent, leading to gains among Dow components trading premarket. 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. led gains among chipmakers, with a jump of 8.4 percent, 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.

Shares of fellow semiconductor makers, including Nvidia Corp., Qualcomm Inc., Intel Corp., and Advanced Micro Devices Inc., rose between 0.7 percent and 3.0 percent.

“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., Microsoft Corp., Apple Inc., Amazon.com Inc., Meta Platforms, and Alphabet Inc., rose between 0.8 percent and 1.3 percent 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.

“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 8:29 a.m. ET, Dow e-minis were up 283 points, or 0.81 percent, S&P 500 e-minis were up 40.25 points, or 0.88 percent, and Nasdaq 100 e-minis were up 169.5 points, or 1.09 percent.

Travel-related stocks, which fell in the previous session on the prospect of tighter curbs, rose on Tuesday. Delta Air Lines Inc. added 1.4 percent to lead gains among U.S. carriers, while Wynn Resorts gained 1.5 percent.

General Mills Inc. slipped 4.9 percent after missing analysts estimates for quarterly profit.

By Shreyashi Sanyal and Bansari Mayur Kamdar