Nasdaq rises on tech boost as economic recovery cools – Reuters UK


(Reuters) – The Nasdaq led gains on Wall Street on Thursday as investors returned to the perceived safety of technology-related stocks with a surprise rise in weekly jobless claims signaling a slowdown in economic growth.

FILE PHOTO: The Wall Street sign is pictured at the New York Stock exchange (NYSE) in the Manhattan borough of New York City, New York, U.S., March 9, 2020. REUTERS/Carlo Allegri/File Photo

Seven of the 11 major S&P indexes were trading higher, with information technology .SPLRCT leading gainers.

Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Netflix Inc NFLX.O, Nvidia Corp NVDA.O and Facebook Inc .FB.O, which have outperformed at a time of increased economic uncertainty and are now trading at lofty valuations, rose between 0.3% and 2.3%.

“The market is in this painful battle between those who are thirsty for further Fed involvement versus those who are fiercely focused on fundamentals and believe the market is overbought,” said Eric Schiffer, chief executive of private equity Patriarch Organization in Beverly Hills, California.

Waning hopes of more fiscal stimulus, signs of a faltering business recovery and a sell-off in technology-related names have weighed on U.S. stocks this month.

The S&P 500 briefly fell 10% below its intraday record high hit on Sept. 2. If the benchmark index closes at that level, it will enter correction territory.

Dow constituents, considered a barometer of economic confidence, lagged the S&P 500 on Thursday as data showed 870,000 Americans applied for jobless benefits in the week ended Sept. 19, up from 866,000 in the previous week.

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Job cuts have spread to industries such as financial services and technology that were not initially impacted by the mandated business closures in mid-March because of insufficient demand.

At 11:39 a.m. ET, the Dow Jones Industrial Average .DJI was up 0.08%, the S&P 500 .SPX was up or 0.31% and the Nasdaq Composite .IXIC was up 0.79%.

The CBOE volatility index .VIX edged higher for the third time in four days.

“The key is the VIX index, which has not yet reached levels that would suggest a continued strong move to the downside,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

“So you might get a day of bargain hunting followed by a day of selling, but as the last days of September come into place, we should begin to see some sort of window dressing by institutions.”

Homebuilders .SPHOME climbed 0.7% as sales of new single-family homes increased to their highest level in nearly 14 years last month.

Nikola Corp NKLA.O, which is set for its biggest weekly decline ever, slumped another 10.9% as Wedbush downgraded the stock to “underperform”.

Accenture Plc ACN.N fell 6.1% after the IT consulting firm forecast current-quarter revenue below expectations and missed estimates for fourth-quarter sales, hurt by lower spending from clients impacted by the COVID-19 pandemic.

U.S.-listed shares of BlackBerry Ltd BB.N jumped 6.7% after the Canadian security software firm posted a surprise rise in quarterly revenue, led by higher demand for its security software suite, Spark, and its QNX car software.

Declining issues outnumbered advancers 1.82-to-1 on the NYSE and 1.62-to-1 on the Nasdaq.

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The S&P index recorded no new 52-week high and two new lows, while the Nasdaq recorded six new highs and 115 new lows.

Reporting by Sagarika Jaisinghani and Devik Jain in Bengaluru; Editing by Arun Koyyur



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