New York: US stocks rose modestly on Wednesday, boosted by technology shares and an Amazon-led jump in retailers, helping pull the S&P 500 from the brink of bear market territory following punishing few sessions.
The technology sector, whose 9.2 per cent slump in the past four sessions was the steepest among the 11 major S&P sectors, rose 1.15 per cent.
Retailers gained, with the S&P 500 retailers subindex jumping 1.75 per cent, after a Mastercard report showed US holiday sales were the strongest in six years. Amazon.com Inc rose 2.22 per cent after reporting a “record-breaking” season.
Other members of the FANG group, Facebook Inc, Netflix Inc and Alphabet Inc, which has also been under pressure recently, rose between 0.4 per cent and 2.8 per cent.
“We expect a relief rally that may continue for a few days as end of the quarter window dressing ups the chances of bargain hunting,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
At 10:04am. ET, the Dow Jones Industrial Average was up 35.68 points, or 0.16 per cent, at 21,827.88, a day after the Christmas holiday.
The S&P 500 was up 9.05 points, or 0.38 per cent, at 2,360.15 and the Nasdaq Composite was up 67.39 points, or 1.09 per cent, at 6,260.30.
But after rising more than 1 per cent shortly after the start, the gains started fading.
The S&P has lost 7.7 per cent in the past four sessions, ending Monday at a 20-month low and 19.8 per cent below its all-time closing high, just shy of the 20-percent threshold that commonly defines a bear market. Roughly three-fourths of the S&P 500 stocks are already in the bear market territory.
The Dow is off 18.9 per cent from its closing high, while the Nasdaq is already in bear market along with the Dow Jones Transport Average and the small-cap stocks.
“The ‘Bear Grip’ is feeding on itself as Trump continues to spread uneasiness,” said Cardillo.
President Donald Trump said on Tuesday partial shutdown of the US federal government, which has entered the fifth day, will last until his demand for funds to build a wall on the US-Mexico border is met.
The political impasse over the funding bill and the recent unexpected departure of the US defence chief have added to investor worries that include US-China trade tensions and other geopolitical events crimping global growth and corporate profit.
Trump has said the Federal Reserve is the “only problem” for the US economy, repeatedly criticising the central bank for raising interest rates. He hit out at the Fed again on Tuesday, but expressed confidence in Treasury Secretary Steven Mnuchin.
Mnuchin on Monday held a call with US regulators to discuss plunging US stock markets. The call did more to rattle markets than to assure them and all three major US stock indexes ended down more than 2 per cent on the day.
The S&P and the Dow have fallen about 12 per cent for the year, while the Nasdaq has shed 10 per cent, with just four more trading sessions left to wrap up the year.
Advancing issues outnumbered decliners by a 1.45-to-1 ratio on the NYSE and a 2.15-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week highs and 106 new lows, while the Nasdaq recorded three new highs and 207 new lows.
