Stocks rose on Thursday as tech shares continued their rebound following a torrid three-day sell-off.
The Dow Jones Industrial Average traded 117 points higher, or 0.4%. The S&P 500 gained 0.5% and the Nasdaq Composite advanced by 1.1%.
Apple shares were up 1%, building on a 4% jump from the previous session. Tesla was up 7.4% after surging nearly 11% on Wednesday. Earlier this week, Tesla suffered its worst day on record. Amazon, Netflix, Alphabet and Microsoft were also higher.
Thursday’s moves follow a broad rally for the market on Wednesday, with the S&P 500 posting its best day since June. The Nasdaq pulled itself out of correction territory after a sell-off for major tech stocks dragged down the market for three straight sessions.
“Wednesday witnessed a partial recovery … but we do believe that the switchback ride of the last 5 weeks will have placed at least a temporary cap on the powerful advance that has taken place since March,” Michael Shaoul, chairman and CEO of Marketfield Asset Management. “This is not to say that the damage is irreversible, particularly if key support at the 50‐day moving average manages to hold in the coming sessions, but it will probably take a few weeks before the September 2nd high can be fully tested or surpassed.”
The three-day drop came amid increasing worry on Wall Street about a tech bubble, with those stocks fueling the Nasdaq to record highs despite the hit to the economy from the coronavirus pandemic. Some said the pullback did not go far enough, with Duquesne Family Office CEO Stanley Druckenmiller telling CNBC on Wednesday morning that the market was in an “absolute raging mania.”
Others pointed to reasons why the market could regain its footing once again. Liz Young, the director of market strategy for BNY Investment Management, said the investor cash still parked on the sidelines after the pandemic-induced sell-off in February and March should provide support for stocks.
“People go to cash in droves — and it’s immediate, it’s a big wave. They come back in drips. So as it drips back in, that cash is going to look for more attractive valuation opportunities. So I think it’s natural that it would look for things that have been a little more beaten down or some of the stocks that haven’t driven us up to this point,” Young said on “Closing Bell.” “But I don’t think we’re in a place now where you have to start selling rallies and taking exposure off the table.”
Jobless claims disappoint
Traders pored over key unemployment data on Thursday.
The Labor Department said the number of first-time filers for unemployment benefits came in at 884,000. Economists polled by Dow Jones expected claims to come in at 850,000.
“Economic growth will rebound sharply in Q3 and again in Q4 but these labor market stats still point to a long way to go in terms of hiring,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.
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