Top NewsUS News

Dow jumps more than 250 points on tech bounce, but still headed for 4-week losing streak

The Fearless Girl statue is seen outside the New York Stock Exchange (NYSE) in New York City, New York, U.S., June 11, 2020.

Brendan McDermid | Reuters

U.S. stocks rose on Friday as tech shares recovered some of their declines for the month. However, Wall Street was still headed for its fourth consecutive week of losses. 

The Dow Jones Industrial Average traded 257 points higher, or 0.9%. The S&P 500 climbed 1.3%. The Nasdaq Composite popped 1.9%.

Shares of Amazon rose 2.1% and Facebook gained 1.5%. Apple advanced 3% and Microsoft climbed 2%. Netflix traded 1.6% higher. The S&P 500 tech sector jumped 1.9%.

Cruise operators also contributed to Friday’s gains. Carnival, Norwegian Cruise Line and Royal Caribbean were up 8.6%, 11.6% and 7.2%, respectively, after an upgrade from a Barclays analyst

The “sell-off has stabilized a bit over the last few days, but there are still no real signs of strength,” said Mark Newton, managing member at Newton Advisors, in a note. “Thus, the trend remains bearish and not much to bet on a rebound.”

For the week, the Dow was down 2.6% while the S&P 500 has lost 1.5%. The two market benchmarks were headed for their first four-week losing streak since August 2019. The Nasdaq eked out a small week-to-date gain. 

The major averages have also had a tough month, with the S&P 500 falling more than 6% in September. The Dow has dropped 5.2% over that time period and the Nasdaq is down 8.2% month to date. 

“After a buoyant and hopeful summer, financial markets are cooling in the face of reality,” strategists at MRB Partners said in a note. “High-flying tech and tech-related stocks are in a full-blown correction, and weakness has recently spread to broader indexes, with a distinct smell of risk-off in the air. We had expected a gradual, albeit choppy, economic recovery, but it appears that some investors were not prepared for setbacks along the way.”

Much of September’s losses have been concentrated in megacap tech stocks, which carry a heavy weight in the indexes. Shares of Apple — the largest publicly traded company in the U.S. by market cap — have dropped more than 14% this month. Microsoft, Alphabet, Netflix, Amazon and Facebook are all down at least 8.5% over that time period. 

Russ Koesterich, managing director and portfolio manager at BlackRock, said on CNBC’s “Closing Bell” on Thursday that his team took profits in some high-flying tech stocks at the end of August and then were buying more cyclical stocks during the recent drop for the market. 

“What we’ve been trying to do in recent weeks is take the cyclical exposure up a little bit … it’s not that we think tech is going to roll over. We still like the themes. But on a shorter-term tactical basis, we’re comfortable with the economy, we think we’re going to continue to see improvement, and we’re looking for names that are levered to that improvement,” Koesterich said. 

The state of the economic recovery has become a hot topic in recent weeks on Wall Street, especially after the death of Supreme Court Justice Ruth Bader Ginsburg led many strategists to downgrade the chances for another relief package before the election. On Thursday, Goldman Sachs cut its fourth-quarter projection for gross domestic product growth to 3% on an annualized basis, down from 6%. 

House Democrats are preparing a $2.4 trillion relief package that they could vote on as soon as next week, a source familiar with the plans told CNBC. The bill would include enhanced unemployment benefits and aid to airlines, but the overall price tag remains well above what Republican leaders have said they are willing to spend. 

—CNBC’s Jacob Pramuk contributed to this story. 

CORRECTION: A previous headline for this report was updated to note that Dow futures were higher, rather than the Dow Jones Industrial Average itself.

View Article Origin Here

Related Articles

Back to top button