Stocks roar back, led by tech rebound
Gut-wrenching volatility extended into a 12th week Monday as U.S. equities plunged and recovered, with the Dow Jones Industrial Average reversing a 508-point decline as tech shares bounced.
Major U.S. indexes finished in the green, buoyed by rallies in Facebook Inc. and Microsoft Corp. The pound tumbled as traders took a grim view of the outlook for the U.K. after Theresa May delayed a crucial Brexit vote. The dollar jumped and oil dropped.
Investors found an excuse to buy the dip Monday after the S&P 500 fell to the lowest intraday level since April, continuing a volatile period for U.S. equities. Traders may need to steel themselves for the possibility of the U.K. leaving the European Union without a deal, another worry amid already fragile sentiment in financial markets and lingering trade-war fears. But for now, traders were happy to buy shares of the biggest tech companies.
The S&P 500 index gained 4.64 points, or 0.2 percent, to 2,637.72. The Dow added 34.31 points, or 0.1 percent, to 24,423.26. Technology companies, which have fallen sharply since October, did better. The Nasdaq composite rose 51.27 points, or 0.7 percent, to 7,020.52.
“Tech is running this market; it’s unbelievable,” Tom Essaye, a former Merrill Lynch trader who founded “The Sevens Report” market newsletter, said in an interview.
Qualcomm rose after the chipmaker said a Chinese court banned some Apple phones as part of a long-running dispute over patents.
U.K. Prime Minister May postponed a key parliamentary Brexit vote rather than risk a bruising defeat, and wouldn’t commit to a new date for a vote. The EU Court of Justice said that Britain could unilaterally choose to change tack and stay in the union, while European Council President Donald Tusk made clear the deal would not be renegotiated.
Auto companies led the retreat in the Stoxx Europe 600 Index as concern about the strength of China’s economy lingered.
Elsewhere, Asian stocks fell. India’s rupee weakened as exit polls showed Prime Minister Narendra Modi’s party was set for tight electoral contests in key states and as the central bank governor, Urjit Patel, resigned. Oil erased some of Friday’s rally triggered by OPEC and its allies agreeing on production cuts. Emerging-market shares and currencies fell.