Sun, Oct 14, 2018 - Page 14 News List

Tech stocks lead Wall Street rebound

RECOVERY:The S&P technology index rose 3.2 percent on Friday, which was its best one-day gain since March 26, but recorded its biggest weekly drop since March 23

Reuters, NEW YORK

The US benchmark S&P 500 stock index on Friday snapped a six-day losing streak as technology stocks recovered after a week of losses, with investors looking for bargains ahead of the third-quarter earnings reporting season.

Even the hard-hit S&P 500 energy and financial sectors managed to close the session with slight gains after a late afternoon rally.

The S&P technology index gained 3.2 percent on the day, showing its strongest one-day gain since March 26, although it still registered its biggest weekly drop since March 23.

“People are starting to buy in, thinking the higher flying growth stocks were oversold. They wanted to get in before next week when earnings start coming,” said Janna Sampson, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.

However, until the US and China reach a trade deal, the rebound in the stock market could be vulnerable as investors are anxious about the impact of tariffs on corporate profits.

“If earnings come out good I think this rally is sustainable if we don’t get negative trade news. Trade news is the wild card. That’s the big if,” Sampson said.

The Dow Jones Industrial Average rose 287.16 points, or 1.15 percent, to 25,339.99, the S&P 500 gained 38.76 points, or 1.42 percent, to 2,767.13 and the NASDAQ Composite added 167.83 points, or 2.29 percent, to 7,496.89.

For the week, the Dow lost 4.19 percent, the S&P fell 4.1 percent and the NASDAQ shed 3.74 percent.

The technology sector’s biggest boosts were Apple Inc and Microsoft Corp, which rose more than 3 percent, while Visa Inc and Mastercard Inc climbed almost 5 percent, boosted by strong credit card sales included in bank earnings reports, Sampson said.

The S&P500’s financial sector ended the day up 0.1 percent and the S&P 500 banks sub-sector closed down 0.4 percent, well above its session low. The biggest drag on the sub-sector was JPMorgan Chase & Co, which closed down 1.0 percent, despite reporting a quarterly profit that beat expectations.

PNC Financial led the percentage losers among bank stocks, with a 5.6 percent drop after the regional bank reported disappointing quarterly loan growth and said it expected only a small improvement in lending this quarter.

The three gainers among banks included Citigroup Inc, which rose 2 percent, and Wells Fargo, which eked out a 1.3 percent gain after upbeat results.

Netflix and Amazon Inc, some of the names that took a big hits in the week’s sell-off, rose 5.7 percent and and 4.0 percent respectively.

The bank results launch a quarterly reporting season that will give the clearest picture yet of the effect on profits from US President Donald Trump’s trade war with China.

Earnings at S&P 500 companies are estimated to have risen 21.5 percent in the third quarter, I/B/E/S data from Refinitiv showed, a slowdown from the previous two quarters.

Energy stocks ended the day up 0.3 percent as oil prices steadied to settle up slightly after a volatile session dropped on a weakening oil demand outlook.

The consumer discretionary and communication services sectors, both rose more than 2 percent.

Advancing issues outnumbered declining ones on the NYSE by a 1.38-to-1 ratio; on NASDAQ a 1.51-to-1 ratio favored advancers.

The S&P 500 index posted no new 52-week highs and 52 new lows; the NASDAQ Composite recorded 10 new highs and 234 new lows.

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