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Wall Street closes up on tech rally despite mixed signs on economic rebound

Published Sep 24, 2020 07:20AM ET Updated Sep 24, 2020 05:10PM ET
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© Reuters. FILE PHOTO: The Wall Street sign is pictured at the New York Stock exchange (NYSE) in the Manhattan borough of New York City, U.S.
 
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By Herbert Lash

(Reuters) - Wall Street rallied in a rocky session on Thursday as beaten-down technology shares gained favor after data showing a surge in the sale of new homes revived faith in the economic recovery even as U.S. jobless claims rose unexpectedly.

Stocks also reacted positively to news of efforts to enact further stimulus in Washington, helping lift the S&P to a session high, although the index then turned negative before retracing some gains.

Apple Inc (O:AAPL), Amazon.com Inc (O:AMZN), Nvidia Corp (O:NVDA) and Facebook Inc (NASDAQ:FB) <.FB.O>, stocks that have outperformed at a time of increased economic uncertainty, all rose.

The wild session indicated caution was in store, said Dennis Dick, a trader at Bright Trading LLC, who warned market sentiment that drove momentum has sharply changed.

"Fear of missing out has turned into to fear of losing actual money," Dick said. "This is a shakeout of all the Robinhood traders, a shakeout of retail investors. They're getting punished, and rightfully so, because you can't just buy stocks out of a hat thinking stocks only go up."

Democrats in the U.S. House of Representatives are working on a $2.2 trillion coronavirus stimulus package that could be voted on next week, a key lawmaker said, as House Speaker Nancy Pelosi reiterated she is ready to negotiate with the White House.

Wall Street started the day lower after the jobless claims data. The S&P 500 briefly fell 10% below the intraday record peak it hit Sept. 2 for the second time in recent days.

Dow constituents, considered a barometer of economic confidence, lagged the S&P 500 as data showed 870,000 Americans applied for jobless benefits in the week ended Sept. 19, up from 866,000 in the previous week.

Homebuilders <.SPHOME> rose 0.73% after the Commerce Department reported that sales of new single-family homes rose to their highest level in nearly 14 years in August. That report followed data this week showing sales of previously owned homes also near a 14-year high.

Phil Orlando, chief equity strategist at Federated Hermes (NYSE:FHI), said notwithstanding spats of poor data, the U.S. economy is on a path to a powerful V-shaped recovery as seen in auto sales, the housing market and overall consumer spending.

"All of the inventory rebuilding is starting, all of the things you want to see are happening," Orlando said. "Now, are there some chinks in the armor? Yes, just saw it in the claims numbers this morning."

The Dow Jones Industrial Average (DJI) closed up 52.31 points, or 0.20%, to 26,815.44. The S&P 500 (SPX) gained 9.67 points, or 0.30%, to 3,246.59, and the Nasdaq Composite (IXIC) added 39.28 points, or 0.37%, to 10,672.27.

Volume on U.S. exchanges was 10.43 billion shares, up from 10.04 billion shares on Wednesday.

The CBOE volatility index (VIX), known as Wall Street's fear gauge and which is hovering near two-week highs, is expected to climb in the run-up to the quarter-end next week.

"The key is the VIX index, which has not yet reached levels that would suggest a continued strong move to the downside," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. "So you might get a day of bargain hunting followed by a day of selling, but as the last days of September come into place, we should begin to see some sort of window dressing by institutions."

Nikola Corp (O:NKLA), which is set for its biggest weekly decline ever, slid 9.69% as Wedbush downgraded the stock to "underperform."

Accenture Plc (N:ACN) fell 7.04% after the IT consulting firm forecast current-quarter revenue below expectations, while U.S.-listed shares of BlackBerry Ltd (N:BB) initially jumped after the Canadian security software firm posted a surprise rise in quarterly revenue, but finished the day lower.

Declining issues outnumbered advancing ones on the NYSE by a 1.08-to-1 ratio; on Nasdaq, a 1.36-to-1 ratio favored decliners.

The S&P 500 posted no new 52-week highs and two new lows; the Nasdaq Composite recorded 12 new highs and 129 new lows.

Wall Street closes up on tech rally despite mixed signs on economic rebound
 

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Comments (13)
Jerry Chan
Jerry Chan Sep 24, 2020 2:14PM ET
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stock rises on vacine/stimulus hopes and drops at cool recovery. Just apply this to all articles.
Thom Miller
Thom Miller Sep 24, 2020 12:59PM ET
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See Oil Merchant’s below post.....For an “oil merchant” that’s a very strange endorsement because Trump and Pence have totally destroyed the US oil market that Obama and Biden built into energy independent status. So let’s see what else Trump destroyed that he inherited from Obama/Biden...a roaring US economy, super-charged stock markets, a healthy population, a very positive US reputation abroad (now all foreign leaders laugh at Trump), and on and on and on. Yep, Four More Years! Four More Years! Four More Years! LOL! LOL! LOL! I think he calls himself an “oil merchant” because of his long career at Jiffy Lube....
Ami Segal
Ami Segal Sep 24, 2020 12:02PM ET
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bable bable and again bable
Space Lord
Space Lord Sep 24, 2020 11:27AM ET
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TRUMP2020, PENCE2024, MAGA
Thom Miller
Thom Miller Sep 24, 2020 11:27AM ET
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For an “oil merchant” that’s a very strange endorsement because Trump and Pence have totally destroyed the US oil market that Obama and Biden built into energy independent status. So let’s see what else Trump destroyed that he inherited from Obama/Biden...a roaring US economy, super-charged stock markets, a healthy population, a very positive US reputation abroad (now all foreign leaders laugh at Trump), and on and on and on. Yep, Four More Years! Four More Years! Four More Years! LOL! LOL! LOL!
Sep 24, 2020 11:05AM ET
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Bull trap!. Jim Cramer looked straight into the TV and said buy tech smh.. Soulless lol.. the Daq will finish red again
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Matt Kay
Matt Kay Sep 24, 2020 11:05AM ET
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 Could be. How are you short? selling futures? selling calls? buying puts?
Sep 24, 2020 11:05AM ET
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I stand corrected.. I see head and shoulders pattern forming!!bought puts in Zm this morning.
Sep 24, 2020 11:05AM ET
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I stand corrected.. I see head and shoulders pattern forming!!bought puts in Zm this morning.
Clinton Powell
Clinton Powell Sep 24, 2020 11:05AM ET
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At what price?
Sep 24, 2020 11:05AM ET
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got in at 482$ closed out after it bounce of fib 459... looking at Tqqq puts tomorrow if Head shoulder pattern closes
Daniel Morel
Daniel Morel Sep 24, 2020 11:04AM ET
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Quite ridiculous DO NOT FOLLOW financial advise DO NOT over complicate things DO NOT see be short term. I have been invested for 51 years, since i got my first paycheck as a young engineer. When I advanced in my career i deferred 90% of my salary and 100% of my bonus invested in Mutual funds at Fidelity and Vangard then some broad market ETF. I read but never follow any financial comentary i watch financial channels for entertainment - after 51 years my average is + 11.8% with a high of 38% and a low of - 11%. I sell when my profit is +10% for a stock and +15% for a call option - I keep 25% in cash to gradually buy the dips - i was able to send two kids to grad school / buy properties in New york / a house on a private island in Miami Beach and a flat In London. I am writing while having breakfast from a 27 meters chartered sailing yacht facing the island of SANTORINI in greece. Every hard working person can do that - just stick to one strategy - be patient -
Matt Kay
Matt Kay Sep 24, 2020 11:04AM ET
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Yeah, boomers could do that by destroying future for the rest of us. Thanks
Edward Chong
Edward Chong Sep 24, 2020 11:04AM ET
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santorini i like the sunset and caves hotel haha.
graeme hughes
graeme hughes Sep 24, 2020 11:04AM ET
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Why bother bragging Dan?! Rates were 20% in the early 1970s, the cycle of rates reductions over the past 50 years will never be repeated, therefore stocks in general will never again repeat the performance we have seen since. Economics 101... just enjoy the fact you were born at a time you could benefit.
Joo Lee
Joo Lee Sep 24, 2020 10:58AM ET
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Dead cat bounce
Ahmed ALamery
Ahmed ALamery Sep 24, 2020 10:49AM ET
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bery poor report Fake News
Czar Freeman
Czar Sep 24, 2020 10:42AM ET
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poor financial reporting 😔
Mahesh Patel
Mahesh Patel Sep 24, 2020 10:18AM ET
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wow i was waiting for it
 
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