Off The Wire
Led by tech, Wall Street rebounds at end of volatile week
(Reuters) - Wall Street surged in volatile trading on Friday, with the Nasdaq rebounding at the end of a week that saw it extend losses to about 10% from its previous record high.
All three main indexes bounced back from losses earlier in the day, with investors in recent sessions spooked by rising interest rates that offset optimism about an economic rebound.
Microsoft rallied 2.2%, boosting the S&P 500 more than any other stock, with gains in Intel, Alphabet and Oracle also lifting the index.
The benchmark 10-year U.S. Treasury yields hit a new one-year high of 1.626% after nonfarm payrolls increased by 379,000 jobs last month, blowing past a rise of 182,000 forecast by economists polled by Reuters.
Focus is also on a $1.9 trillion coronavirus aid bill as a sharply divided U.S. Senate began what was expected to be a long debate over a slew of amendments on how that money would be spent.
The Nasdaq was headed for its third straight weekly decline after a recent spike in Treasury yields dented demand for high-flying technology stocks.
Rising interest rates disproportionately hurt high-growth tech companies because investors value them based on earnings expected years into the future, and high interest rates hurt the value of future earnings more than the value of earnings made in the short term.
The tech-heavy Nasdaq is about 9% below its Feb. 12 closing high. This week, it has lost about 3%.
Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma, said his firm in recent days has bought shares in a handful of growth companies whose prices have been pummeled in the recent selloff.
“Next week, I would expect volatility to continue, with pockets of opportunity, with certain things that sold off potentially rebounding,” Dollarhide said.
In afternoon trade, the Dow Jones Industrial Average was up 1.24% at 31,309.13 points, while the S&P 500 gained 1.22% to 3,814.35.
The Nasdaq Composite was up 0.76% to 12,820.07, bouncing back from a loss of over 2%.
The S&P 500 energy sector index jumped almost 3% to a year high as oil prices soared. [O/R]
Oracle Corp jumped about 6% after Barclays upgraded the business software maker to “overweight” expecting improvement in the IT spending environment.
Advancing issues outnumbered declining ones on the NYSE by a 1.48-to-1 ratio; on Nasdaq, a 1.07-to-1 ratio favored advancers.
The S&P 500 posted 40 new 52-week highs and no new lows; the Nasdaq Composite recorded 161 new highs and 132 new lows.
Reporting by Shashank Nayar and Medha Singh in Bengaluru; Editing by Aurora Ellis