TSLA Tesla Inc

By Gunjan Banerji 

The S&P 500's technology sector soared past the broader market Monday, a sign of the group's resilience after the worst Wall Street selloff since the financial crisis.

The tech sector, which contains shares of cloud companies and software providers, gained 5.7%, far outpacing the broader market's 4.6% jump. Additionally, the sector has continued to outperform the index this year. It is one of two sectors in the S&P 500 that turned positive for the year, rising 1.6% in 2020. The S&P 500 lurched higher Monday but remains down about 4.4% this year.

Some analysts remain confident in the group's relative strength, wagering that a handful of technology firms will keep surging. Many investors had bet earlier this year that tech heavyweights would be more shielded from the effects of an economic downturn than other corners of the market.

Daniel Ives, an analyst at Wedbush Securities, considers Microsoft Corp., Apple Inc., Tesla Inc. and Adobe Inc. among the top names to hold during the market volatility, which has been spurred by fears of the spreading coronavirus. The coronavirus can hurt some tech companies' supply chains and stoke uncertainty about demand, but doesn't overshadow the group's long-term potential, he wrote.

"With this backdrop our playbook/strategy is not to hide under the covers in markets like this, watch the red screens with frozen fear, and let the uncertainty of the coronavirus outbreak cloud our bullish longer term view of these transformational tech names and themes for the coming years," wrote Mr. Ives.

Still, last week's selloff showed how the technology darlings that helped power the S&P 500 higher for much of 2020 can quickly drag it lower. Investors fled some of the top momentum trades during the rout.

Apple was the biggest contributor to the S&P 500's negative total return for 2020 through Friday, according to S&P Dow Jones Indices, accounting for almost 7% of the slide. The S&P 500's total return through Friday was minus-8.3%.

Its fortunes turned on Monday. Apple was one of the day's best-performing S&P 500 stocks, jumping 9.3%, its biggest one-day gain since 2008.

Write to Gunjan Banerji at Gunjan.Banerji@wsj.com

(END) Dow Jones Newswires

March 02, 2020 16:43 ET (21:43 GMT)

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