By Ankika Biswas and Shristi Achar A
(Reuters) -Wall Street's main indexes bounced back on Friday as U.S. Treasury yields retreated from 16-year highs, while shares of Ford jumped to a one-week high on news of progress in labor talks with the United Auto Workers (UAW) union.
Ford advanced 2.5%, helping the consumer discretionary sector gain 0.4%.
The UAW said it will expand its strikes against General Motors (NYSE:GM) and Chrysler parent Stellantis. GM shares were down 0.2%.
The two-year and 10-year Treasury yields pulled back from their 2006 and 2007 highs hit on Thursday, driving a rebound in some growth stocks. Apple (NASDAQ:AAPL), Amazon.com (NASDAQ:AMZN), Nvidia and Tesla (NASDAQ:TSLA) were up between 1.4% and 2.1%.
Despite the slight recovery, the benchmark S&P 500 was on track for its worst week since March and the tech-heavy Nasdaq since August after the U.S. central bank delivered a hawkish pause on Wednesday, sparking worries over another interest rate hike in 2023 and prospects of a delay in policy easing.
"People are trying to catch their breath ... but lot of headwinds facing this market," said Brandon Pizzurro, director of public investments at GuideStone Capital Management. "I'm not sure this uptrend can sustain."
Having fallen through several support levels during the recent selloff, Truist Advisory Services' Chief Market Strategist Keith Lerner expects the S&P 500 to face a key support at 4,200 points.
At 12:08 p.m. ET, the S&P 500 was up 15.69 points, or 0.36%, at 4,345.69, the Dow Jones Industrial Average was up 22.32 points, or 0.07%, at 34,092.74, and the Nasdaq Composite was up 94.56 points, or 0.72%, at 13,318.55.
Data on Friday revealed U.S. business activity showed little change in September, with the vast services sector essentially idling at the slowest pace since February.
U.S. central bank policymakers, including policy voting member Minneapolis Fed President Neel Kashkari, are set to speak during the day.
So far, Fed Boston President Susan Collins and Fed Governor Michelle Bowman stressed the need for further rate hikes to tackle still-high inflation.
Traders' bets on the benchmark rate remaining unchanged in November and December stood at 73% and 58%, respectively, according to CME's FedWatch tool.
Communication services and energy stocks were the top S&P 500 sector index gainers, while utilities sector was the worst hit.
Activision Blizzard (NASDAQ:ATVI) added 1.7% after Britain's antitrust regulator said the restructured $69 billion acquisition of the company by Microsoft (NASDAQ:MSFT) "opens the door" to the biggest-ever gaming deal being cleared.
U.S.-listed shares of Chinese firms including PDD Holdings, JD.com, Li Auto and Baidu (NASDAQ:BIDU) rose between 2.3% and 3.8% on hopes of a rebound in economic growth, while Alibaba (NYSE:BABA) gained 4.7% on a report that the company's logistics arm Cainiao was planning to file for a Hong Kong IPO as soon as next week.
Wayfair rose 1.6% after Bernstein upgraded the online furniture retailer to "market perform" from "underperform".
Advancing issues outnumbered decliners for a 1.63-to-1 ratio on the NYSE and a 1.17-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week high and 32 new lows, while the Nasdaq recorded 21 new highs and 217 new lows.