BUSINESS US stocks jump after two days of sharp losses; tech leads


US stocks jump after two days of sharp losses; tech leads

01:18, October 13, 2018

Wall Street.jpeg

In this June 24, 2016, file photo, a man walks by the New York Stock Exchange. The US stock market opened at 9:30 am on Friday, October 12, 2018. (Photo: AP)

US stocks are climbing Friday after two days of sharp losses as market favorites like Apple lead the way higher. Major indexes are up more than 1 percent, but they’re still on track for their biggest one-week loss since late March.

Technology companies recovered after taking some hard hits over the last two days. Apple climbed 2.9 percent to $220.71 and Microsoft gained 2.8 percent to $108.83. Consumer-focused companies also rallied, as Amazon jumped 4.1 percent to $1,789 and Netflix surged 5.5 percent to $338.74.

The S&P 500 index climbed 36 points, or 1.4 percent, to 2,765 at 11:20 a.m. The benchmark index tumbled 5.3 percent over the past two days and as of Thursday it had fallen for six consecutive days. The S&P is down 5.6 percent since from its latest record high, set Sept. 20.

The Dow Jones Industrial Average jumped 278 points, or 1.1 percent, to 25,330. The Nasdaq composite surged 149 points, or 2 percent, to 7,478. The Russell 2000 index gained 10 points, or 0.7 percent, to 1,555. That index, which is made up of smaller and more US-focused companies, has fallen into a 10-percent “correction” since reaching a record high at the end of August.

On the New York Stock Exchange, winners outnumbered losers by nearly three to one.

The market’s recent losing streak started when strong economic data and positive comments from Federal Reserve Chair Jerome Powell helped set off a wave of selling in the bond market. Investors dumped bonds as they bet that the US economy would keep growing at a healthy pace. The sales pushed bond prices lower and yields to seven-year highs.

That drove interest rates sharply higher, which worried investors who felt that a big increase in interest rates could eventually stifle economic growth. Higher yields also make bonds more appealing to investors versus stocks.

The most startling declines this week came from companies that have done very well recently, including technology companies and retailers. On Wednesday the three most valuable U.S. companies, Apple, Microsoft and Amazon, each took their biggest loss in more than two years. It was a dramatic end to three months of calm on the US market.

Several other groups of stocks that have struggled this year are now in a “correction,” a drop of at least 10 percent from a recent peak. They include basic materials makers, internet companies, banks and household goods makers.

Bond prices turned lower as the stock market stabilized. The yield on the 10-year Treasury note rose to 3.15 percent from 3.13 percent.

US automakers Ford and General Motors continued to slump. GM shed 0.4 percent to $32.19, its lowest in almost two years, and Ford dipped 0.1 percent to $8.81, its lowest in almost nine years. Both have fallen more than 20 percent this year as the Trump administration’s tariffs on steel and aluminum send their manufacturing costs higher.

The stocks have fallen further in recent days following reports Ford might cut jobs. In late September, Ford CEO Jim Hackett said the steel and aluminum duties would cost the company $1 billion through 2019.

Stocks in Europe were little changed. The French CAC 40 rose 0.1 percent and the DAX in Germany slipped 0.1 percent, while Britain’s FTSE 100 was little changed. Asian stocks climbed. Japan’s Nikkei 225 index gained 0.5 percent after sinking early in the day and following a nearly 4 percent loss on Thursday. Hong Kong’s Hang Seng surged 2.1 percent and the Kospi in South Korea rose 1.5 percent.

High-dividend stocks including utilities, real estate investment trusts and household goods traded lower or rose less than the rest of the market. Those stocks held up a bit better than the S&P 500 over the last six days. Investors view them as relatively safe, steady assets that look better when growth is uncertain and the rest of the market is in turmoil.

US crude oil added 1 percent to $71.69 a barrel in in New York. Brent crude, the international standard, inched up 0.1 percent to $80.31 a barrel in London.

The dollar rose to 112.14 yen from 111.94 yen. The euro fell to $1.1558 from $1.1594.

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