Growth stocks lift Wall Street out of slowdown worries; energy shares down

China cuts key rates as economic data disappoints; energy shares down as oil tumbles on demand worries; yields slip on renewed global slowdown concerns

Wall Street's main indexes gained in choppy mid-day trading on Monday as a jump in megacap growth and technology stocks powered a recovery from early losses on slowdown worries after China's weak economic data. As U.S. Treasury yields pulled back, high-growth companies, whose valuations are sensitive to rising bond yields, gained.

Tesla added 3%, while Alphabet and Microsoft Corp gained 0.3% each, lifting the Nasdaq.

"We remain for the most part in a Teflon market where bad news is being shrugged off," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

China's central bank cut key lending rates in a surprise move to revive demand after the economy unexpectedly slowed in July as Beijing's zero-COVID policy and a property crisis squeezed factory and retail activity.

U.S.-listed shares of China's e-commerce giant Alibaba Group Holding Ltd slipped 0.6%, while those of internet firm Baidu Inc fell 0.8%.

Energy stocks traded 1.9% lower as crude prices tumbled on concerns over demand in China, the world's largest importer of oil.

Exxon Mobil Corp, Chevron Corp, Halliburton Co and Marathon Oil Corp were all down between 1.9% and 3.3%.

At 12:21 p.m. ET, the Dow Jones Industrial Average was up 111.71 points, or 0.33%, at 33,872.76, the S&P 500 was up 8.41 points, or 0.20%, at 4,288.56, and the Nasdaq Composite was up 43.50 points, or 0.33%, at 13,090.68.

Investors have been optimistic after a recent batch of data raised hopes the Federal Reserve could achieve a soft landing for the economy, helping the S&P 500 recover half of its losses this year in the last few weeks.

"Expectations remain that at least for those in the bullish camp, we've seen peak inflation, the Fed is not going to raise rates anywhere near as aggressively once we get past September and six plus months from now, the economy is going to be on a much better footing," Wedbush's James said.

Toward the end of the last week, the benchmark index and the Nasdaq posted their fourth straight week of gains even as Fed officials pushed back expectations of an end to rate hikes sooner than anticipated and economists warned inflation could return in the coming months.

Of the 456 companies in the S&P 500 that have reported earnings as of Friday, 77.6% have topped expectations, according to Refinitiv data.

Investors are bracing for quarterly reports from big retailers this week, with comments from Walmart Inc and Target Corp likely to set the tone for the sector that is facing the brunt of weak demand.

Nexstar Media Group, the largest local TV station owner in the United States, declined 1.3% after saying it will acquire a majority stake in the CW Network, home to popular shows such as "Riverdale" and superhero show "The Flash".

Declining issues outnumbered advancers for a 1.12-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.10-to-1 ratio on the Nasdaq.

The S&P index recorded five new 52-week highs and 29 new lows, while the Nasdaq recorded 54 new highs and 24 new lows.