NEW YORK CITY, RAW – Wall Street has ended sharply higher as Microsoft and Apple spearheaded a strong rebound in growth stocks and investors awaited monthly payrolls data later this week that could influence the US Federal Reserve’s decision on when to scale back monetary stimulus.
Apple, Microsoft, Amazon and Alphabet – Wall Street’s most valuable companies – each rose following a sell-off in growth stocks the day before.
Facebook Inc rebounded a day after taking a beating when its app and its photo-sharing platform Instagram went offline for hours.
Almost all of the 11 major S&P 500 sector indexes rose, with financials, communication services and technology among the top performers.
The S&P 500 logged its fourth straight day of 1.0 per cent moves in either direction.
The last time the index had that much volatility was in November 2020 when it rose or fell 1.0 per cent or more for seven straight sessions.
“We’re buying the dip but the dip isn’t 10 per cent anymore. The dip is now 2.0 per cent or 4.0 per cent,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.
“People are trained like Pavlov’s dog to buy the dip, which is reinforcing all of this.”
Technology stocks and other high-growth stocks took a beating on Monday as US Treasury yields ticked higher amid concerns about a potential US government debt default.
The Senate will vote on Wednesday on a Democratic-backed measure to suspend the US debt ceiling, a key lawmaker said on Tuesday as partisan brinkmanship in Congress risks an economically crippling federal credit default.
Investors will watch September employment data on Friday for hints about the tapering of the US Federal Reserve’s asset purchase program.
Adding to concerns the Fed could tighten monetary policy sooner than expected, recent data showed increased consumer spending, accelerated factory activity and elevated inflation.
Data from the Institute for Supply Management showed its US non-manufacturing activity index edged up to a reading of 61.9 last month from 61.7 in August.
The S&P 500 gained 45.23 points, or 1.05 per cent, to end at 4,345.69 points, while the Nasdaq Composite gained 178.35 points, or 1.25 per cent, to 14,433.83 and the Dow Jones Industrial Average rose 315.57 points, or 0.93 per cent, to 34,318.49.
The S&P 500 is down more than 3.0 per cent from its record high close on September 2.
However, about half of the index’s components have fallen 10 per cent or more from their own 52-week highs.
PepsiCo Inc gained after raising its full-year revenue forecast.