Stocks Bounce After Extended Selloff, Led by Tech Sector
August 22 2017 - 5:48PM
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 added nearly 200 points in its
biggest jump since late April. Some of Tuesday's biggest gainers
were stocks that were hit hard in recent sessions, including shares
of brick-and-mortar retailers and semiconductor companies.
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. The Dow Jones Industrial Average
shed 418 points in the two weeks ended Friday.
But those concerns appear to be easing this week, investors and
analysts said, with stocks drawing support from a strong earnings
quarter, steady economic growth and slightly more attractive
valuations following recent share declines.
"It's the strength of the economy, not just here, but globally,
that matter most to stocks," said Lew Piantedosi, director of
growth equity for Eaton Vance.
"Earnings have been reasonably healthy for the last few
quarters, too," he said.
The Dow Jones Industrial Average gained 196.14 points, or 0.9%,
to 21899.89 Tuesday. The S&P 500 added 24.14 points, or 1%, to
2452.51, and the Nasdaq Composite gained 84.35 points, or 1.4%, to
6297.48, its biggest gain since June 28.
Technology companies in the S&P 500 rose 1.5%. Semiconductor
company Lam Research added $5.41, or 3.4%, to $163.81, and Western
Digital added 2.79, or 3.3%, to 86.65.
Cisco Systems -- which shed 4% in Thursday's selloff -- gained
59 cents, or 1.9%, to 31.27.
Retailers were on the rebound, too. Shares of Macy's gained 89
cents, or 4.6%, to 20.42 after the company said it hired a senior
eBay executive and streamlined its top management.
Shoe retailer DSW rose 2.74, or 17%, to 18.43 after it posted
same-store sales growth for the first time in six quarters.
The SPDR S&P Retail exchange-traded fund rose 1.4% after
declining 3.7% last week.
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 was set to include Federal Reserve Chairwoman Janet Yellen
and European Central Bank President Mario Draghi.
Investors were 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 17:33 ET (21:33 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.