US STOCKS-Wall Street ends higher on tech rally to snap three-day skid

  • Reuters
  • Stock Market News
US STOCKS-Wall Street ends higher on tech rally to snap three-day skid
Credit: © Reuters.

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* Tech-related stocks lead gains on the Dow

* Tesla climbs after biggest one-day drop

* Tiffany falls as LVMH abandons its $16 bln takeover

* Dow up 1.6%, S&P 500 up 2.01%, Nasdaq up 2.71% (Adds closing prices, market details)

By Chuck Mikolajczak

NEW YORK, Sept 9 (Reuters) - Wall Street's main indexes ended higher on Wednesday to snap a three-session losing skid as investors jumped back in to take advantage of the pullback in technology-related stocks, a day after the Nasdaq confirmed correction territory.

Tesla Inc TSLA.O shares rebounded 10.92% after suffering their biggest one-day percentage drop in the prior session, while Apple Inc AAPL.O , Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O - the top three U.S. public companies by market capitalization - each rose by at least 3%.

Other stay-at-home winners such as Facebook Inc FB.O and Google-parent Alphabet Inc GOOGL.O also climbed, a day after the tech-heavy Nasdaq ended 10% below its Sept. 2 record closing high, commonly known as a correction. The S&P tech sector .SPLRCT notched its biggest one-day percentage gain since April 29.

"It's certainly a massive, surprising rebound," said Jack Ablin, chief investment officer at Cresset Capital Management in Chicago.

"On one level it looks speculative but on another it is almost defensive because we know these companies will survive no matter what COVID throws at us."

Analysts also said the Nasdaq's ability to hold its 50-day moving average, a technical support level, was key in reversing the market's direction.

The Dow Jones Industrial Average .DJI rose 439.58 points, or 1.6%, to close at 27,940.47, the S&P 500 .SPX gained 67.12 points, or 2.01%, to 3,398.96 and the Nasdaq Composite .IXIC added 293.87 points, or 2.71%, to 11,141.56.

The percentage gains marked the best one-day performance for the S&P since June 5, the Nasdaq since April 29 and the Dow since July 14.

U.S. stocks have become susceptible to volatility as market leadership has narrowed during the year to a handful of heavyweight tech-related stocks as traders bid up their shares in a rally that triggered a Nasdaq-led rebound for Wall Street from its pandemic lows in March.

The recent pullback has also been driven by worries that sellers of call options would unwind massive amounts of stocks they bought as hedges during the rally.

Media reports last week said SoftBank Group Corp 9984.T has made big bets on equity derivatives tied to tech firms.

In a sign of growing unease about the positioning in tech stocks, skew, a measure of demand for protective put options in relation to call options, has risen sharply. volatility is expected to further increase in the run-up to the U.S. presidential election, with September and October also historically turbulent months of the year.

In a reversal from the prior three sessions, growth stocks .IGX jumped 2.59% to outperform the 1.13% climb in value stocks .IVX .

Market participants were watching for signs of a widening in market breadth, supported by improving economic data.

AstraZeneca Plc AZN.L could resume trials for its experimental coronavirus vaccine next week, the Financial Times reported, after the British drugmaker paused global trials of its experimental COVID-19 vaccine. Still, its U.S.-listed shares fell 1.96%. & Co TIF.N tumbled 6.44% after French luxury goods giant LVMH LVMH.PA warned it was set to walk away from its planned $16 billion takeover of the U.S. jeweler. issues outnumbered declining ones on the NYSE by a 2.98-to-1 ratio; on Nasdaq, a 2.27-to-1 ratio favored advancers.

The S&P 500 posted 3 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 31 new highs and 25 new lows.

About 8.91 billion shares changed hands in U.S. exchanges, compared with the 9.21 billion daily average over the last 20 sessions.

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