Stocks bounce back on Wall Street as tech bloodletting halts

Stocks bounce back on Wall Street as tech bloodletting halts

Stocks bounce back on Wall Street as tech bloodletting halts

NEW YORK — Wall Street snapped back to life on Wednesday, recovering from its worst stretch of losses in months, as the bloodletting for big technology stocks came to at least a temporary halt.

Apple, Amazon and other tech companies that suddenly lost their momentum late last week on worries their stocks soared too high all regained some ground. They helped the S&P 500 rally 67.12, or 2%, to 3,398.96. It was the best day in three months for the index, which recovered a little more than a quarter of its losses from the prior three days.

The Dow Jones Industrial Average climbed 439.58, or 1.6%, to 27,940.47. The Nasdaq composite, which includes many tech stocks, rose 293.87, or 2.7%, to 11,141.56. It had dropped 10% over the previous three days.

Tesla, which has made some of the wildest moves in recent months, rose 10.9%. A day earlier, it plunged 21.1% for its worst day since its shares began trading a decade ago. In August, it surged 74.1%.

Selling over the last week in the market had focused on such tech superstars, which earlier zoomed through the pandemic amid expectations that they would benefit from the new stay-at-home economy. Blockbuster spring profit reports from many of them emboldened investors, who bid their stock prices up to levels that critics called too expensive, even after accounting for their powerful growth.

A flurry of buying of stock options for big tech stocks may have helped further goose the gains, analysts say.

That helped the S&P 500 and Nasdaq push repeatedly to record highs as recently as last week, even though the economy is still struggling with the coronavirus pandemic. But the fever broke on Thursday, with the S&P 500 dropping 7% in three days, its steepest loss over such a timeframe in nearly three months.

“The fact is that there was a broad consensus that it was overbought, and the rally was overextended and due for some sort of pullback,” said Quincy Krosby, chief market strategist at Prudential Financial.

Still to be determined is whether the sell-off was just a blowing-off of some steam for tech stocks that had gotten overheated — or whether it was the beginning of a more widespread downturn.

It doesn’t help that September is traditionally a weak month for stocks, Krosby said. “Is this the pause, or are we due for more selling?”

Other sectors didn’t get as expensive as technology during the recent run-up. Banks and other financial stocks in the S&P 500 are still down more than 19% for 2020 so far, for example. But challenges continue to loom over the entire market, including uncertainty about how the pandemic will progress.

Trade issues remain a worry for markets, and the souring U.S.-China relationship gets the brightest spotlight. But that’s not the only potential hot spot.

Tiffany lost 6.4% after European luxury giant LVMH ended its $14.5 billion takeover deal for the jewelry retailer. LVMH said it made the move in part because the French government requested a delay due to the threat of proposed U.S. tariffs on French products.

Investors are also waiting for Congress to deliver more aid to the economy after unemployment benefits and other stimulus that it approved earlier ran out. Investors say it’s critical that the economy get such stimulus, but partisan disagreements have Congress at an apparent impasse.

A Senate vote this week on a trimmed-down relief package proposed by Republicans has only a slim chance of passage as Democrats insist on more sweeping aid.

The stock market’s rally started in late March following massive amounts of aid from the Federal Reserve and Congress. It accelerated as the economy showed signs of improvement. Corporate profit reports for the spring that weren’t as disastrous as expected also helped lift the market.

Late Tuesday, Slack Technologies also reported what analysts called a good quarter, with revenue topping expectations. But the company reported billings that were weaker than expected, and its stock tumbled 13.9%.

Hopes for a potential COVID-19 vaccine also helped the S&P 500 erase all of its nearly 34% loss from earlier in the pandemic. U.S-listed shares of AstraZeneca slipped 2% Wednesday, though, after it put late-stage studies of its vaccine candidate on temporary hold while it investigates whether a recipient’s illness is a side effect of the shot.

Treasury yields ticked higher, with the 10-year yield rising to 0.69% from 0.68% late Tuesday.

Crude oil clawed back some of its slide from the prior day. Benchmark U.S. crude rose $1.29 to settle at $38.05 per barrel. Brent crude, the international standard, added $1.01 to $40.79 per barrel.

European stocks closed higher, while Asian markets fell.

___

AP Business Writer Elaine Kurtenbach contributed.

Stan Choe, Alex Veiga And Damian J. Troise, The Associated Press

Business

Get local stories you won't find anywhere else right to your inbox.
Sign up here

 

Stocks bounce back on Wall Street as tech bloodletting halts

Just Posted

(Black Press file photo.)
Red Deer city council holds closed-door discussion about proposed aquatics centre

Recommended design, cost and location won’t be made public until next spring

A community gathering space was created in front of the new Red Deer Culture Services Centre before the 2019 Canada Winter Games. (Advocate file photo).
Red Deer’s Culture Services Centre to get additional $4.6 M in renovations

It’s one of many capital projects approved by city council

Alberta’s chief medical officer of health, Dr. Deena Hinshaw, reported an additional 1,307 COVID-19 cases Tuesday. (Photo by Chris Schwarz/Government of Alberta)
Central zone up to 1,249 active COVID-19 cases

Red Deer sits at 257 active COVID-19 cases

Mayor
Mayor Veer appointed as Honorary Lieutenant-Colonel

Red Deer Mayor Tara Veer has been appointed an Honorary Lieutenant-Colonel by… Continue reading

Const. Jason Tress
Mountie testifies another RCMP officer sexually assaulted her at 2012 party

Former Mountie on trial for sexual assault in connection with incident in northwestern Alberta

Idyllic winter scenes are part of the atmosphere of the holiday season, and are depicted in many seasonal movies. How much do you know about holiday movies? Put your knowledge to the test. (Pixabay.com)
QUIZ: Test your knowledge of holiday movies and television specials

The festive season is a time for relaxing and enjoying some seasonal favourites

Team Manitoba celebrate after defeating Team Ontario to win the Scotties Tournament of Hearts in Moose Jaw, Sask., Sunday, Feb. 23, 2020. Curling Canada wants Calgary's Canada Olympic Park to be a curling hub for the season's top events. THE CANADIAN PRESS/Jonathan Hayward
CP NewsAlert: Calgary facility set to become curling hub during pandemic

CP NewsAlert: Calgary facility set to become curling hub during pandemic

Toronto FC coach Greg Vanney watches late in the second half of the team's MLS Cup soccer match against the Seattle Sounders on Sunday, Nov. 10, 2019, in Seattle. Vanney has stepped down as coach of Toronto FC. THE CANADIAN PRESS/AP Photo-Elaine Thompson
Toronto FC coach Greg Vanney steps down, says it’s the right time to move on

Toronto FC coach Greg Vanney steps down, says it’s the right time to move on

Hamilton Forge FC's Giuliano Frano (8) heads the ball against CD Olimpia's Jorge Benguche (9) during Scotiabank CONCACAF League 2019 second half soccer action in Hamilton, Ontario on Thursday, August 22, 2019. Forge FC looks to win its way into the Scotiabank CONCACAF Champions League on Tuesday when it takes on Haiti's Arcahaie FC in the quarterfinals of the CONCACAF League, a 22-team feeder competition that sends six clubs to CONCACAF's elite club tournament. THE CANADIAN PRESS/Peter Power
Forge FC loses penalty shootout to Haitian side in CONCACAF League quarterfinal

Forge FC loses penalty shootout to Haitian side in CONCACAF League quarterfinal

Public health must balance science and society: former top doctor

Public health must balance science and society: former top doctor

California boat captain indicted in fire that killed 34

California boat captain indicted in fire that killed 34

President Donald Trump participates in a video teleconference call with members of the military on Thanksgiving, Thursday, Nov. 26, 2020, at the White House in Washington. (AP Photo/Patrick Semansky)
Trump headed to Georgia as runoff boost, but also a threat

Trump headed to Georgia as runoff boost, but also a threat

Flames and exhaust trail behind a Long March-5 rocket carrying the Chang'e 5 lunar mission after it lifted off at the Wenchang Space Launch Center in Wenchang in southern China's Hainan Province, early Tuesday, Nov. 24, 2020. China launched an ambitious mission on Tuesday to bring back material from the moon's surface for the first time in more than 40 years — an undertaking that could boost human understanding of the moon and of the solar system more generally. (AP Photo/Mark Schiefelbein)
China spacecraft lands on moon to bring rocks back to Earth

China spacecraft lands on moon to bring rocks back to Earth

FILE - In this March 16, 2020, file photo, vials used by pharmacists to prepare syringes used on the first day of a first-stage safety study clinical trial of the potential vaccine for COVID-19 rest on a lab table at the Kaiser Permanente Washington Health Research Institute in Seattle. An influential scientific panel on Tuesday, Dec. 1, is set to tackle one of the most pressing questions in the U.S. coronavirus epidemic: When the first doses of COVID-19 vaccine become available, who should be at the front of the line for shots? (AP Photo/Ted S. Warren, File)
US panel: 1st vaccines to health care workers, nursing homes

US panel: 1st vaccines to health care workers, nursing homes

Most Read