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By Johann M Cherian and Ankika Biswas
(Reuters) - Tech-laden Nasdaq jumped more than 1% to a near one-week high on Monday, boosted by a rebound in megacaps and chip stocks, while blue-chip index Dow slipped to a fresh two-week low as Boeing shares tanked following the grounding of some its jets.
Megacaps like Amazon.com and Alphabet gained over 1%, while Apple climbed 1.4% after saying its Vision Pro mixed-reality device will be available for sale from Feb. 2 in the United States.
Chipmakers Nvidia and Advanced Micro Devices jumped more than 4% each. The Philadelphia SE Semiconductor Index rebounded with a 2.6% advance from its worst week since Oct. 2022.
"We do think the gains (in megacaps) will be sustainable after last year's outperformance," said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.
"A lot of investors have been drawn to the mega caps because they are profit machines and in good times, they do really well."
Meanwhile, Boeing slid 6.6% after the U.S. Federal Aviation Administration (FAA) ordered the temporary grounding of some 737 MAX 9 jets fitted with a panel that blew off an Alaska Air Group jet in midair on Friday.
The aircraft manufacturer could lose about $10 billion in value if losses hold through market close.
Energy stocks led declines among the 11 S&P 500 sectors, dropping by 2.1% to a three-week low as crude prices sank over 4% after sharp price cuts by top exporter Saudi Arabia and a rise in OPEC output. [O/R]
At 11:47 a.m. ET, the S&P 500 was up 26.46 points, or 0.56%, at 4,723.70, the Nasdaq Composite was up 171.06 points, or 1.18%, at 14,695.14, and the Dow Jones Industrial Average was down 60.06 points, or 0.16%, at 37,406.05.
On Friday, the benchmark S&P 500 marked its worst week since late October, after mixed economic data turned investors cautious and prompted them to scale back expectations on when the Federal Reserve could begin rate cuts.
Remarks by Atlanta's Raphael Bostic, a Federal Open Market Committee (FOMC) voting member this year, due at 12:30 p.m. ET, will be parsed for his stance on monetary policy easing. Over the weekend, Dallas' Lorie Logan warned the Fed may need to resume raising its short-term policy rate.
Money markets now see a 69.5% chance of at least a 25-basis-point (bps) rate cut as early as March, down from over 85% in the final weeks of 2023, according to the CME FedWatch Tool.
Investors were also awaiting December consumer and producer inflation reports later in the week and commentary by several policymakers for clues on the Fed's monetary policy trajectory.
JPMorgan Chase, Wells Fargo, Bank of America and Citigroup are set to kick off the quarterly earnings season on Friday. Their shares were down over 1% each.
Advancing issues outnumbered decliners by a 2.22-to-1 ratio on the NYSE and by a 1.70-to-1 ratio on the Nasdaq.
The S&P index recorded six new 52-week highs and no new lows, while the Nasdaq recorded 50 new highs and 54 new lows.
(Reporting by Johann M Cherian and Ankika Biswas in Bengaluru; Editing by Devika Syamnath)
