Stocks Bounce After Extended Selloff, Led by Tech Sector
August 22 2017 - 4:16PM
Dow Jones News
By Michael Wursthorn and Christopher Whittall
Technology companies led a broad upswing in U.S. stocks Tuesday,
as investors scooped up shares following recent declines.
The Dow Jones Industrial Average rose for a second straight day
after the index suffered its biggest two-week decline of the year.
Threats between the U.S. and North Korea, as well as turbulence in
Washington that amplified investors' doubts about the Trump
administration's ability to enact agenda items like a tax overhaul,
have weighed on stocks this month.
Some of Tuesday's biggest gainers were stocks that were hit hard
in recent sessions, including shares of brick-and-mortar retailers
and tech giants.
While the political climate continued to be a concern, investors
said the strong earnings quarter, steady economic growth and
slightly more attractive valuations following recent selloffs were
driving markets.
"We're focusing less and less on the political backdrop," said
Lew Piantedosi, director of growth equity for Eaton Vance. "It's
the strength of the economy, not just here, but globally, that
matter most to stocks. Earnings have been reasonably healthy for
the last few quarters, too."
The Dow Jones Industrial Average gained 193 points, or 0.8%, to
21895 in late afternoon trading. The S&P 500 added about 1%,
and the Nasdaq Composite rose 1.3%.
Technology companies in the S&P 500 rose 1.4%. Western
Digital added 3.3%, Cisco Systems -- which shed 4% in Thursday's
selloff -- rose nearly 2% Tuesday and Google parent Alphabet added
2%.
Retailers were on the upswing, too. Shares of Macy's gained 5.3%
after the company said it hired a senior eBay executive and
streamlined its top management. Shoe retailer DSW rose 18% after it
posted same-store sales growth for the first time in six quarters.
The SPDR S&P Retail exchange-traded fund rose 1.6% after
declining 3.7% last week.
Shares of energy companies in the S&P 500 rose 0.7%, with
Oneok and Cabot Oil & Gas posting some of the biggest
advances.
U.S. crude for September gained 0.6% to $47.64 a barrel.
Investments considered to be relatively safe stores of value,
including gold and U.S. Treasury bonds, retreated.
Government bond prices edged lower, with the yield on the
10-year U.S. Treasury note rising to 2.215% from 2.182% on Monday.
Yields rise as prices fall. Gold for August delivery fell 0.4% to
$1,285.10 a troy ounce -- its biggest decline in a week.
Investors also were looking ahead to the Jackson Hole economic
symposium that kicks off Thursday, where the roster of top central
bankers is set to include Federal Reserve Chairwoman Janet Yellen
and European Central Bank President Mario Draghi.
Investors are watching for further details on the Fed's plans to
scale back its balance sheet and clues on when the ECB could trim
its asset purchases, which have helped underpin markets in recent
years.
"We've been conditioned to expect something out of Jackson Hole
each year," said Krishna Memani, OppenheimerFund's chief investment
officer. "If there is a surprise, it'll come from [Mr.]
Draghi."
Stocks beyond the U.S. were mostly higher Tuesday. The Stoxx
Europe 600 rose 0.8%, buoyed by gains in mining shares. Stock
markets in the Asia-Pacific region mostly pushed higher, but
Japan's Nikkei Stock Average slipped less than 0.1%, notching its
11th decline in 13 trading sessions.
Write to Michael Wursthorn at Michael.Wursthorn@wsj.com and
Christopher Whittall at christopher.whittall@wsj.com
(END) Dow Jones Newswires
August 22, 2017 16:01 ET (20:01 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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