Tech lifts stocks after slide
A late-afternoon rebound led by technology companies helped drive stocks higher on Wall Street Thursday, lifting the market from an early slide.
The S&P 500 rose 0.4%, its first gain after a two-day slump. The benchmark index is still on pace for its first weekly loss in four weeks.
The Dow Jones Industrial Average rose 0.3% and the tech-heavy Nasdaq managed a 0.1% gain. Crude oil prices edged lower and bond yields rose.
The choppy day of trading came as investors weighed the latest updates from the Federal Reserve amid concerns about rising inflation. The central bank has signaled it is prepared to keep raising interest rates and reducing its stockpile of bonds and mortgagebacked securities in order to rein in the highest inflation in 40 years.
“The market is certainly having to digest a Fed that appears to be willing to be very aggressive in battling inflation,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management.
The S&P 500 rose 19.06 points to 4,500.21. The Dow gained 87.06 points to 34,583.57. The blue-chip index had earlier been down 305 points. The Nasdaq added 8.48 points to 13,897.30.
Higher interest rates can make pricey growth stocks, like those of Big Tech companies, look less attractive relative to their earnings. Tech stocks have been among the biggest drags on the market the past couple of days and were weighing down the indexes Thursday morning. But the sector began to recover by midafternoon, helping lift the broader market. Microsoft rose 0.6%, and Adobe rose 1.9%.
Health care stocks, retailers and other companies that rely on direct consumer spending also rose after having been down earlier in the day. Pfizer rose 4.3%, Target gained 5.7%, and McDonald’s rose 1.2%.
Communication services stocks were among the biggest weights on the market. Twitter fell 5.4%.
Computer and printer maker HP surged 14.8% for the biggest gain in the S&P 500 after Warren Buffett’s Berkshire Hathaway disclosed an 11% stake in the company.
Bond yields rose. The yield on the 10-year Treasury rose to 2.65% from 2.61% late Wednesday.
Every major index is in the red for the week following two big losses that were partly prompted by concerns over the Fed’s shifting policy as it tries to combat inflation.
Minutes from the Fed’s meeting last month showed policymakers agreed to begin cutting the central bank’s stockpile of Treasurys and mortgage-backed securities by about $95 billion a month, starting in May. That’s more than some investors expected and nearly double the pace the last time the Fed shrank its balance sheet.
Investors received an encouraging update on the job market Thursday. The Labor Department reported that fewer Americans applied for unemployment benefits last week as layoffs remain at historically low levels.
Gold for June delivery rose $14.70 to $1,937.80 an ounce. Silver for May delivery rose 28 cents to $24.74 an ounce, and May copper fell 4 cents to $4.70 a pound.
The dollar rose to 123.97 Japanese yen from 123.78 yen. The euro fell to $1.0879 from $1.090.