NEW YORK (AP) — Wall Street is strengthening again on Tuesday as big technology stocks wrest back more of their losses from their sudden belly flop earlier this month
The S&P 500 was 0.9% higher in early afternoon trading and back within 5% of its record set on Sept. 2. It's on pace for a second day of solid gains, on the heels of its worst week since June after the superstar tech stocks driving the market abruptly lost momentum.
The Dow Jones Industrial Average climbed 128 points, or 0.5%, to 28,122, as of 12:30 p.m. Eastern time. The Nasdaq was up 1.5%.
Stocks in Europe and much of Asia also ticked higher following encouraging economic reports from around the world. In China, retail sales were higher last month than a year earlier for the first such growth this year, after the pandemic pancaked the world's second-largest economy. In Europe's largest economy, a reading on German economic confidence rose more than expected.
In the United States, a report showed that industrial production also strengthened last month. But the growth wasn't as strong as economists were expecting. Other reports showed that manufacturing in the New York state is expanding more than economists expected, as are import and export prices.
Treasury yields were holding relatively steady after giving up some of their earlier gains following the release of the report on industrial production. The yield on the 10-year Treasury was at 0.68%, up from 0.67% late Monday. The 30-year yield ticked up to 1.43% from 1.41%.
Shorter-term rates remain pinned at lower levels on expectations that the Federal Reserve will keep its benchmark rate at nearly zero for some time to help the economy recover. The central bank is beginning its latest meeting on interest-rate policy Tuesday, and it will announce its decision on Wednesday. Economists say it could change some of the language around its existing pledge to buy bonds to support markets, but they expect no major news.
Big Tech stocks continued their recovery this week, with Apple up 1.9%, Microsoft up 1.7% and Amazon up 1.4%. Such stocks soared through much of the pandemic on expectations that their profits will boom as even more of daily life shifts online. But they suddenly lost altitude earlier this month amid worries that their prices had simply climbed too high, even after taking into account their tremendous growth.
Because these companies have grown so massive, their movements alone can dictate the market's performance more than ever. Tech stocks as a group account for nearly 28% of the S&P 500, and they're up 1.5% this week after slumping more than 4% in each of the prior two weeks.
A flurry of buyout deals in the industry helped boost shares on Monday, including Nvidia's agreement to buy chipmaker Arm Holdings in a deal worth up to $40 billion. Many critics and proponents alike agree that prices are high for tech stocks, but big corporate acquisitions mean at least some CEOs see value in buying at current prices despite the worries.
Nvidia rose another 0.5% after jumping 5.8% Monday.
The market's gains were relatively widespread, with more than two thirds of the big stocks in the S&P 500 higher. Stocks of smaller companies were also making gains, and the Russell 2000 index of small-caps was up 0.5%.
On the losing side was Carnival, which dropped 7.3%. The cruise ship operator said it may sell up to $1 billion in stock to raise cash, and it reported a preliminary $2.9 billion loss for its latest quarter. More encouragingly, it also said its advance bookings for the second half of 2021 are similar to where booking positions were in 2018 for the second half of 2019, before the coronavirus pummeled the industry.
Financial stocks were also laggards. JPMorgan Chases fell 2.2%, losing an earlier modest gain. It trimmed its forecast for this year's net interest income, which measures how much profit it makes from interest payments for loans and other products after subtracting the interest it pays out on deposits.
In European stock markets, Germany's DAX returned 0.2%, and the French CAC 40 rose 0.3%. The FTSE 100 in London climbed 1.3%.
In Asia, Japan's Nikkei 225 slipped 0.4%, but other markets were stronger. South Korea's Kospi gained 0.6%, and Hong Kong's Hang Seng rose 0.4%. Stocks in Shanghai added 0.5% after the Chinese report on retail sales, which the country's statistics agency cited as a sign of "stable and continuous" economic recovery.
AP Business Writer Joe McDonald contributed.
More Articles to Read