Tech bounce leads Wall Street higher after two-day tumble
(Reuters) - Wall Street rose on Friday following its worst two-day slide in eight months as technology and other high-growth stocks led a fight back, while early gains from strong earnings of the biggest U.S. lenders, including JPMorgan, faded.
Netflix <NFLX.O>, Amazon <AMZN.O> and Apple <AAPL.O> — some of the names that took a hit from an erratic selloff this week — rose between 1.7 percent and 4.05 percent, setting the Nasdaq for its best day since Aug. 2.
The S&P 500 technology index <.SPLRCT> rose 1.77 percent, providing the biggest boost the S&P 500 <.SPX>.
"The past few days were a bit of a wake-up call, but it also created an opportunity for those who have been missing out to buy some of these high-growth technology names," said Jason Browne, chief investment strategist at FundX Investment Group in San Francisco.
However, financial stocks got little boost after JPMorgan Chase & Co <JPM.N> reversed early gains to trade down 0.6 percent despite reporting a better-than-expected third-quarter profit.
Wells Fargo <WFC.N> climbed 0.9 percent and Citigroup <C.N> was up 1.7 percent after reporting upbeat results.
"Earnings really isn't the catalyst here, it was just an over sold market. At least for a short-term situation, it gave investors a chance to buy," Browne said.
The bank results launch a quarterly reporting season that will give the clearest picture yet of the impact on profits from President Donald Trump's trade war with China.
Earnings at S&P 500 companies are estimated to have risen 21.5 percent in the third quarter, according to I/B/E/S data from Refinitiv, a slowdown from the previous two quarters.
At 12:27 p.m. ET the Dow Jones Industrial Average <.DJI> was up 61.74 points, or 0.25 percent, at 25,114.57, the S&P 500 <.SPX> was up 16.09 points, or 0.59 percent, at 2,744.46 and the Nasdaq Composite <.IXIC> was up 88.55 points, or 1.21 percent, at 7,417.61.
The other major gainers were the consumer discretionary <.SPLRCD> and communication services <.SPLRCL> sectors, which rose 1.26 percent and 1.00 percent, respectively.
The two sectors, along with tech, house the high-growth FAANG group. Amazon <AMZN.O>, Apple <AAPL.O>, Netflix <NFLX.O> and Alphabet <GOOGL.O> were higher. Facebook <FB.O>, however, gave up early gains to trade 0.7 percent lower.
Citigroup recommended buying Netflix's shares, saying the recent sell-off was overdone. The stock's 9.7 percent slide in the past two days is the most among the FAANGs.
However, Philip Morris <PM.N> fell 1.1 percent and Altria <MO.N> dropped 1.9 percent after the U.S. Food and Drug Administration reasserted its previous focus on reducing nicotine in cigarettes, in a presentation.
Advancing issues outnumbered decliners for a 1.22-to-1 ratio on the NYSE and a 1.55-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week highs and 37 new lows, while the Nasdaq recorded eight new highs and 152 new lows.
(Reporting by Shreyashi Sanyal and additional reporting by Sruthi Shankar in Bengaluru; editing by Patrick Graham and Shounak Dasgupta)
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