Wall Street ends sharply higher as Big Tech rebounds
Wall Street ended sharply higher on Tuesday, as Microsoft and Apple spearheaded a strong rebound in growth stocks and investors awaited monthly payrolls data later this week that could influence the U.S. Federal Reserve’s decision on when to scale back monetary stimulus.
Apple, Microsoft, Amazon and Alphabet, Wall Street’s most valuable companies, each rose more than 1% following a selloff in growth stocks the day before.
Facebook Inc rebounded 2.1% a day after taking a beating when its app and its photo-sharing platform Instagram went offline for hours.
Nine of the 11 major S&P 500 sector indexes rose, with financials, communication services and technology leading the way.
The S&P 500 logged its fourth straight day of 1% moves in either direction. The last time the index saw that much volatility was in November 2020, when it rose or fell 1% or more for seven straight sessions.
“We’re buying the dip, but the dip isn’t 10% anymore. The dip is now 2%, or 4%,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma. “People are trained like Pavlov’s dog to buy the dip, which is reinforcing all of this.”
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Technology stocks and other high-growth stocks took a beating on Monday as U.S. Treasury yields ticked higher amid concerns about a potential U.S. government debt default.
The Senate will vote on Wednesday on a Democratic-backed measure to suspend the U.S. debt ceiling, a key lawmaker said on Tuesday, as partisan brinkmanship in Congress risks an economically crippling federal credit default.
Investors will watch September employment data on Friday for hints about the tapering of the U.S. Federal Reserve’s asset purchase program.
Adding to concerns the Fed could tighten monetary policy sooner than expected, recent data showed increased consumer spending, accelerated factory activity and elevated inflation.
Data from the Institute for Supply Management showed its U.S. non-manufacturing activity index edged up to a reading of 61.9 last month from 61.7 in August.
The Dow Jones Industrial Average rose 0.92% to end at 34,314.67 points, while the S&P 500 gained 1.05% to 4,345.73.
The Nasdaq Composite climbed 1.25% to 14,433.83.
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The S&P 500 is down more than 3% from its record high close on Sept. 2. However, about half of the index’s components have fallen 10% or more from their own 52-week highs.
PepsiCo Inc gained 0.6% after raising its full-year revenue forecast.
Volume on U.S. exchanges was 10.3 billion shares, compared with the 10.9 billion average over the last 20 trading days.
Advancing issues outnumbered declining ones on the NYSE by a 1.45-to-1 ratio; on Nasdaq, a 1.43-to-1 ratio favored advancers.
The S&P 500 posted 16 new 52-week highs and 7 new lows; the Nasdaq Composite recorded 71 new highs and 207 new lows.
(Reporting by Noel Randewich in Oakland, California; additional reporting by Shreyashi Sanyal and Devik Jain in Bengaluru; Editing by Anil D’Silva, Maju Samuel and David Gregorio)
