US STOCKS-Wall Street closes higher on Amazon boost, despite economic worries

* Amazon rises as Bernstein says pandemic tailwind to
continue
* Tesla falls after warning of production challenges
* Information technology, consumer discretionary lead gains

(Updates to market close at 4 p.m.)
By Herbert Lash
Sept 22 (Reuters) - Wall Street stocks rebounded on Tuesday,
led by a jump in Amazon.com, even as a likely delay in new
fiscal stimulus by Congress and an increase in the number of
coronavirus cases dampened hopes of a faster economic recovery.
Amazon.com Inc AMZN.O jumped after Bernstein upgraded the
stock to "outperform," saying the company will continue to
receive a boost from premium subscribers and third-party
merchants even once the pandemic is contained. Microsoft Corp MSFT.O , Apple Inc AAPL.O , Alphabet Inc
GOOGL.O and Facebook Inc FB.O , which together have fueled
Wall Street's rally since the pandemic slammed markets in March,
all rose more than 1%. They had carried the brunt of recent
declines.
"The market is looking for some stability. Once again
investors and traders are going to look to names that had gotten
unduly beaten up," said Kenny Polcari, chief market strategist
at SlateStone Wealth LLC in Jupiter, Florida.
Seven of the 11 major S&P 500 sector indexes were trading
higher, led by information technology .SPLRCT and consumer
discretionary .SPLRCD .
U.S. stocks on Monday extended a three-week losing streak as
fears of a new round of lockdowns in Europe and the stalemate in
Congress over the size and shape of another coronavirus-response
bill dented hopes of a swift economic recovery.
"We have some fears about a number of different things that
hurt the near-term growth outlook," said Jim Paulsen, chief
investment strategist at The Leuthold Group in Minneapolis, who
also cited the Federal Reserve's cautious economic outlook.
"These are short-term fears that will go away because I think
there's quite a bit of undertow to the upside."
The benchmark S&P 500 .SPX on Monday closed almost 9%
below the record high hit Sept. 2, putting it a little more than
a percentage point away from sliding into correction territory.
Investors are now bracing for an extended period of market
volatility on concerns over growing political uncertainty in
Washington that has been sharpened by the death last week of
Supreme Court Justice Ruth Bader Ginsburg. "All the political energies are going to be directed towards
the next Supreme Court nomination. I don't see them paying
attention to that and pushing stimulus through at the same
time," said Mike Zigmont, head of trading and research at
Harvest Volatility Management in New York.
Fed Chair Jerome Powell on Tuesday told a congressional
panel that the economy had shown "marked improvement" since the
pandemic drove it into recession, but the path ahead remains
uncertain and the U.S. central bank will do more if needed.
Chicago Fed President Charles Evans also warned that the
economy risks a longer, slower recovery, if not another outright
recession, if Congress fails to pass more stimulus. Unofficially, the Dow Jones Industrial Average .DJI rose
140.48 points, or 0.52%, to 27,288.18, the S&P 500 .SPX gained
34.4 points, or 1.05%, to 3,315.46, and the Nasdaq Composite
.IXIC added 180.56 points, or 1.68%, to 10,959.36.
Tesla Inc TSLA.O fell after Chief Executive Elon Musk
warned about the difficulties of speeding up production as an
expert cautioned that the electric carmaker's increased reliance
on large-scale aluminum parts could bring new manufacturing
challenges. Tesla's slide weighed the most among declining
shares on the Nasdaq.
Oracle Corp ORCL.N slid on a report by a state-backed
Chinese newspaper that Beijing was unlikely to approve a
proposed deal by the software maker and Walmart WMT.N for
ByteDance's TikTok.