Wall Street rebounds from six-day losing streak thanks to technology stock
The markets snapped a losing streak as investors looked for bargains even as worries about US-China trade tensions lingered
Wall Street rose on Friday after a bounce in technology and other high-growth stocks led a fight back from its worst two-day slide in eight months.
The markets snapped a six-day losing streak as investors looked for bargains even as worries about US-China trade tensions lingered.
The Dow Jones Industrial Average rose 1.15 per cent, the S&P 500 added 1.42 per cent and the Nasdaq Composite was up 2.29 per cent.
Despite the strong gains, the Dow and S&P 500 finished the week down by more than 4 per cent, and the Nasdaq posted a 3.7 per cent weekly loss. They marked their worst weekly declines since March.
“People are starting to buy in, thinking the higher-flying growth stocks were oversold,” said Janna Sampson, co-chief investment officer at OakBrook Investments in Lisle, Illinois.
But until the United States and China reach a trade deal, the rebound could be vulnerable as investors are anxious about the impact of tariffs on corporate profits. “If earnings come out good I think this rally is sustainable if we don’t get negative trade news,” she said.
Kicking off the earnings reporting period, three of the largest US banks reported double-digit profit growth on Friday. The results reflected an array of positive business factors including a lift from cost-cutting programs implemented after the 2007-2009 financial crisis.
The biggest market shakeout since February has been blamed on factors including fears about the impact of the US-China tariff fight, a spike in US bond yields this week and caution ahead of earnings season.
“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.
US Treasury yields edged up, recovering from falls in the previous session, as investors unwound safe-haven bids.
“Rising interest rates, higher yields and an accelerating economy sets the perfect environment for banks but the fact that they have underperformed the markets is a factor that has weighed,” said Aaron Clark, portfolio manager at GW&K Investment Management in Boston.