US STOCKS-Nasdaq and S&P 500 add to rally, stoked by inflation optimism

Declines in healthcare stocks weighed on the Dow Jones Industrial Average, with UnitedHealth Group losing more than 5%. The S&P 500 growth index, which includes interest rate-sensitive technology stocks, rose 1.4%, while the value index was mostly unchanged.

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Growth stocks lead value, Nasdaq rallies *

Indexes: S&P 500 +0.82%, Nasdaq +1.84%, Dow -0.15% (New throughout, updates prices, market activity and comments to mid-day)

By Noel Randewich and Sruthi Shankar Nov 11 (Reuters) -

The S&P 500 and Nasdaq rose on Friday, extending a rally started the day before after a soft inflation reading raised hopes the Federal Reserve would get less aggressive with U.S. interest rate hikes. Amazon jumped 4.5%, with Apple and Microsoft up more than 1% each and contributing to the Nasdaq's strong gain.

On Thursday, the S&P 500 and the Nasdaq racked up their biggest daily percentage gains in more than 2-1/2 years as annual inflation slipped below 8% for the first time in eight months. Declines in healthcare stocks weighed on the Dow Jones Industrial Average, with UnitedHealth Group losing more than 5%.

The S&P 500 growth index, which includes interest rate-sensitive technology stocks, rose 1.4%, while the value index was mostly unchanged. "What we're really seeing today is simply a follow-through on yesterday. There's a lot of cash sitting on the sidelines that is being put to work," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.

"Perhaps it signals some type of bottom being put in the market, some type of line drawn in the sand. But even if we put in a bottom, we're a long way away from setting new highs,” Ghriskey said. Of the 11 S&P 500 sector indexes, seven rose, led by energy , up 2.84%, followed by a 2.48% gain in communication services.

Investors see a 81% chance of a 50-basis point rate hike in December and a 19% chance of a 75-basis point hike, according to CME Fedwatch tool. Adding some nervousness on Wall Street, crypto exchange FTX said it would start U.S. bankruptcy proceedings and that CEO Sam Bankman-Fried resigned due to a liquidity crisis that prompted intervention from regulators around the world.

In afternoon trading, the S&P 500 was up 0.82% at 3,988.77 points. The Nasdaq gained 1.84% to 11,318.39 points, while the Dow Jones Industrial Average was down 0.15% at 33,664.89 points.

The S&P 500 has gained over 6% in the past two sessions, while the Nasdaq has added about 9%. Worries about an economic downturn have hammered Wall Street this year. The S&P 500 remains down about 16% year to date, on course for its biggest annual decline since 2008.

U.S.-listed shares of Chinese companies rose, with Alibaba Group Holding Ltd gaining 1.9% after China eased some of its strict COVID-19 rules. Advancing issues outnumbered falling ones within the S&P 500 by a 1.6-to-one ratio.

The S&P 500 posted 22 new highs and no new lows; the Nasdaq recorded 84 new highs and 90 new lows.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)