NEW YORK: Gains in beaten-down technology shares and Boeing led U.S. stock indexes higher on Wednesday, after concerns about inflation and rising Treasury yields sparked one of Wall Street’s worst selloffs this year.
Ten of the 11 major S&P sectors rose in early trading, with technology and communication services among the top gainers.
Energy shares were the worst performers, as a rally in crude prices petered out. Still, the sector has gained 3% so far this week and is on track for its best monthly performance since February.
Shares of heavyweights Amazon.com Inc, Facebook Inc, Microsoft Corp, Apple and Google-parent Alphabet Inc rose slightly in early trade, but were nursing steep losses from the prior session.
A 4.4% jump in shares of Boeing Co also lifted the blue-chip Dow and the benchmark S&P 500.
Rate-sensitive tech stocks got a boost as 10-year U.S. Treasury yields fell after jumping 20 basis points on signals from the Federal Reserve that it could tighten its monetary policy in the months ahead. Analysts at Vanda Research said retail investors bought $1.9 billion in U.S. equities in Tuesday’s broad market selloff, of which almost 50% of single stock purchases have been concentrated in technology stocks. The S&P 500 index is now set to break its seven-month winning streak as fears about China Evergrande’s default, potential higher corporate taxes and a sooner-than expected tapering of monetary support by the Fed clouded investor sentiment in what is usually a seasonally weak month.
At 9:53 a.m. ET, the Dow Jones Industrial Average was up 156.80 points, or 0.46%, at 34,456.79, the S&P 500 was up 25.21 points, or 0.58%, at 4,377.84 and the Nasdaq Composite was up 114.56 points, or 0.79%, at 14,661.24.
Meanwhile, U.S. Senate Republicans blocked a bid by President Joe Biden’s Democrats to head off a potentially crippling U.S. credit default for a second day in a row, as partisan tensions rattled an economy recovering from the COVID-19 pandemic.
JP Morgan Chase & Co Chief Executive Jamie Dimon also cautioned a U.S. default would be a “potentially catastrophic” event.
Dollar Tree Inc jumped 10% after the discount retailer boosted its share buyback plan to a total of $2.5 billion.
Advancing issues outnumbered decliners by a 1.86-to-1 ratio on the NYSE and by a 1.34-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week high and no new low, while the Nasdaq recorded nine new highs and 46 new lows.