Tech bounce leads Wall Street higher after two-day tumble

Tech bounce leads Wall Street higher after two-day tumble

By Shreyashi Sanyal

(Reuters) - Wall Street rose on Friday following its worst two-day slide in eight months as technology and other high-growth stocks led a fight back, while early gains from strong earnings of the biggest U.S. lenders, including JPMorgan, faded.

Netflix, Amazon and Apple — some of the names that took a hit from an erratic selloff this week — rose between 1.7 percent and 4.05 percent, setting the Nasdaq for its best day since Aug. 2.

The S&P 500 technology index rose 1.77 percent, providing the biggest boost the S&P 500.

"The past few days were a bit of a wake-up call, but it also created an opportunity for those who have been missing out to buy some of these high-growth technology names," said Jason Browne, chief investment strategist at FundX Investment Group in San Francisco.

However, financial stocks got little boost after JPMorgan Chase & Co reversed early gains to trade down 0.6 percent despite reporting a better-than-expected third-quarter profit.

Wells Fargo climbed 0.9 percent and Citigroup was up 1.7 percent after reporting upbeat results.

"Earnings really isn't the catalyst here, it was just an over sold market. At least for a short-term situation, it gave investors a chance to buy," Browne said.

The bank results launch a quarterly reporting season that will give the clearest picture yet of the impact on profits from 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, according to I/B/E/S data from Refinitiv, a slowdown from the previous two quarters.

At 12:27 p.m. ET the Dow Jones Industrial Average was up 61.74 points, or 0.25 percent, at 25,114.57, the S&P 500 was up 16.09 points, or 0.59 percent, at 2,744.46 and the Nasdaq Composite was up 88.55 points, or 1.21 percent, at 7,417.61.

The other major gainers were the consumer discretionary and communication services sectors, which rose 1.26 percent and 1.00 percent, respectively.

The two sectors, along with tech, house the high-growth FAANG group. Amazon, Apple, Netflix and Alphabet were higher. Facebook, however, gave up early gains to trade 0.7 percent lower.

Citigroup recommended buying Netflix's shares, saying the recent sell-off was overdone. The stock's 9.7 percent slide in the past two days is the most among the FAANGs.

However, Philip Morris fell 1.1 percent and Altria dropped 1.9 percent after the U.S. Food and Drug Administration reasserted its previous focus on reducing nicotine in cigarettes, in a presentation.

Advancing issues outnumbered decliners for a 1.22-to-1 ratio on the NYSE and a 1.55-to-1 ratio on the Nasdaq.

The S&P index recorded no new 52-week highs and 37 new lows, while the Nasdaq recorded eight new highs and 152 new lows.

(Reporting by Shreyashi Sanyal and additional reporting by Sruthi Shankar in Bengaluru; editing by Patrick Graham and Shounak Dasgupta)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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Updated Date: Oct 13, 2018 00:05:57 IST

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