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Wall St set for slightly higher open; Tesla rises on Musk poll outcome

2022-12-19T14:05:32Z

Wall Street’s main stock indexes were set to open slightly higher on Monday after two straight weeks of losses on recession worries, while Tesla shares rose after a poll showed Elon Musk should quit as Twitter’s CEO.

Shares of the electric-car maker (TSLA.O) gained 2.5% in premarket trading after the poll showed about 57.5% of the 17.5 million people voted in favor of him stepping down from Twitter.

The S&P 500 (.SPX) and the Nasdaq (.IXIC) lost over 2% each last week after Fed Chair Jerome Powell signaled more policy tightening, and the central bank projected that interest rates would top the 5% mark in 2023, a level not seen since 2007.

“There’s still a cloud over the markets (from last week). But this is one day where the investors are not thinking so much about the bad or thinking so much about a recession,” said Dennis Dick, market structure analyst and trader, Triple D Trading.

“They’re thinking, ‘hey, here’s one of the stocks that has dropped almost 50% since he (Musk) took over Twitter and so here’s the relief rally that we’ve been looking for’.”

Comments from New York Fed President John Williams further bruised sentiment on Friday as he said it remains possible the U.S. central bank will raise rates more than it expects next year.

However, money market participants still place a 73.5% chance of a 25 basis points rate hike in February to 4.5%-4.75%, with a terminal rate of 4.84% in May 2023.

Economic data this week including housing starts, consumer confidence, weekly jobless claims and core personal consumption spending growth for November will set the investor mood, providing more clues on future rate hikes by the central bank.

At 8:32 a.m. ET, Dow e-minis were up 14 points, or 0.04%, S&P 500 e-minis were up 4.5 points, or 0.12%, and Nasdaq 100 e-minis were up 23 points, or 0.2%.

Moderna Inc (MRNA.O) advanced 2.7% after Jefferies upgraded the biotechnology firm’s stock to “buy” from “hold”, citing cancer therapy opportunities.

L3Harris Technologies Inc (LHX.N) lost 1.1% after the U.S. defense contractor said it would buy the hypersonic engine manufacturer, Aerojet Rocketdyne Holdings Inc (AJRD.N), for $4.7 billion. Aerojet added 1.7%.

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A trader works on the trading floor at the New York Stock Exchange (NYSE) in New York City, U.S., December 14, 2022. REUTERS/Andrew Kelly

A trader works on the trading floor at the New York Stock Exchange (NYSE) in New York City, U.S., December 14, 2022. REUTERS/Andrew Kelly