US STOCKS-Fueled by tech, Wall Street rebounds at end of volatile week

Wall Street ended sharply higher after a volatile session on Friday, with the Nasdaq rebounding at the end of a week that saw it extend losses to about 10% from its previous record high. All three main indexes bounced back from losses earlier in the day, with investors in recent sessions spooked by rising interest rates that offset optimism about an economic rebound.

Reuters | Washington DC | Updated: 06-03-2021 11:21 IST | Created: 06-03-2021 02:31 IST
US STOCKS-Fueled by tech, Wall Street rebounds at end of volatile week
Representative Image Image Credit: Flickr

Wall Street ended sharply higher after a volatile session on Friday, with the Nasdaq rebounding at the end of a week that saw it extend losses to about 10% from its previous record high.

All three main indexes bounced back from losses earlier in the day, with investors in recent sessions spooked by rising interest rates that offset optimism about an economic rebound. Microsoft rallied, boosting the S&P 500 more than any other stock, with gains in Alphabet, Apple and Oracle also lifting the index.

The benchmark 10-year U.S. Treasury yields hit a new one-year high of 1.626% after nonfarm payrolls increased by 379,000 jobs last month, blowing past a rise of 182,000 forecast by economists polled by Reuters. Focus is also on a $1.9 trillion coronavirus aid bill as a sharply divided U.S. Senate began what was expected to be a long debate over a slew of amendments on how that money would be spent.

The Nasdaq logged its third straight weekly decline after a recent spike in Treasury yields dented demand for high-flying technology stocks. Rising interest rates disproportionately hurt high-growth tech companies because investors value them based on earnings expected years into the future, and high interest rates hurt the value of future earnings more than the value of earnings made in the short term.

The tech-heavy Nasdaq is around 8% below its Feb. 12 closing high. Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma, said his firm in recent days has bought shares in a handful of growth companies whose prices have been pummeled in the recent selloff.

"Next week, I would expect volatility to continue, with pockets of opportunity, with certain things that sold off potentially rebounding," Dollarhide said. Unofficially, the Dow Jones Industrial Average rose 1.86% to end at 31,497.94 points, while the S&P 500 gained 1.95% to 3,841.78.

The Nasdaq Composite climbed 1.55% to 12,920.15. The S&P 500 energy sector index surged to a year high as oil prices soared.

Oracle Corp jumped after Barclays upgraded the business software maker to "overweight" expecting improvement in the IT spending environment.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)


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