Wall Street edges higher as tech stocks bounce back

(Reuters) – U.S. stocks rose on Tuesday as technology shares recovered from a sharp selloff a day earlier, helping the S&P 500 and the Dow stay above an important technical level.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., March 26, 2018. REUTERS/Brendan McDermid

All the 11 major S&P sectors were higher, and 29 of the 30 Dow components were up by mid-day trading.

Stocks slipped into the red for a brief period after President Donald Trump’s latest attack on Amazon but then quickly recovered.

Tesla shares gained 4.3 percent after the electric automaker said it need not raise more capital this year while announcing it built 2,020 of its cheaper Model 3 sedans in the last seven days of March.

Amazon and Tesla were among the top drags on Monday, pushing the S&P 500 below its 200-day moving average for the first time since Britain’s vote to leave the European Union in June 2016.

“In technology sector, you have some bear forces that work, you’ve an election year that’s going to couple into regulation that wasn’t really priced into the marketplace, especially in social media,” said Matt Lloyd, chief investment strategist at Advisors Asset Management.

“It is not that they are going to be severe underperformers but you want to be selective of where you want to be in technology.”

The technology sector has been battered in recent weeks following Facebook’s data scandal, Trump’s intervention against Amazon and concerns around autonomous cars.

People walk by a Wall Street sign close to the New York Stock Exchange (NYSE) in New York, U.S., April 2, 2018. REUTERS/Shannon Stapleton

At 11:19 a.m. ET, the Dow Jones Industrial Average was up 214.65 points, or 0.91 percent, at 23,858.84, the S&P 500 was up 19.66 points, or 0.76 percent, at 2,601.54 and the Nasdaq Composite was up 60.99 points, or 0.89 percent, at 6,931.11.

Yields on the 10-year Treasury notes rose for the first time in four days. Yields had come under pressure in recent weeks as investors sought safety in U.S. bonds due to stock market volatility.

Nervous investors are hoping an unusually strong U.S. earnings season can restore some of the optimism that characterized equity markets last year.

“In the immediate term there is pressure, but (there is)nothing in long term because the fundamentals are still in place,” said Lloyd.

Investors will be able to buy and sell shares in the Swedish music streaming service Spotify in the New York Stock Exchange’s first-ever direct floor listing.

Viacom Inc dropped more than 3 percent after Reuters reported CBS Corp planned to make an all-stock offer that valued the media company below its current market valuation. CBS shares were up 2.5 percent.

Advancing issues outnumbered decliners on the NYSE for a 2.25-to-1 ratio. On the Nasdaq, 2.36-to-1 ratio favored advancers.

Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila

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