Tech stocks prop up Wall Street amid global growth worries
The S&P 500 and the Nasdaq rose for the first time in four days on Tuesday, boosted by a rebound in technology stocks, but gains were kept in check after the International Monetary Fund said the Sino-U.S. trade war would slow global growth.
The IMF cut global economic growth forecasts for 2018 and 2019, and its 2019 estimates for the United States and China, saying the two countries would feel the brunt of the impact of their trade war next year.
That led to a sluggish start to the session. However, stocks soon pulled higher as heavyweight technology companies shrugged off their weakness over the past few days on concerns about valuations, growth and the pressure of high Treasury yields.
The S&P technology index was up 0.39 percent, gaining for the first time in four sessions. Leading the index higher was Microsoft, up 1.6 percent and Apple, up 1.2 percent.
"Nasdaq was hit all through last week, so to see this bounce back makes sense," said Art Hogan, chief market strategist at B. Riley FBR in New York.
"You get to a point where the growth-momentum names and semiconductors get sold for a while, but investors are now buying before heading into earnings season."
The communication services group gained 0.25 percent as Facebook rose 0.9 percent and Netflix snapped a five-day losing streak to rise 1.6 percent.
At 12:22 p.m. ET the Dow Jones Industrial Average was down 2.90 points, or 0.01 percent, at 26,483.88, the S&P 500 was up 2.39 points, or 0.08 percent, at 2,886.82 and the Nasdaq Composite was up 24.06 points, or 0.31 percent, at 7,760.01.
Walmart rose 2.3 percent, the most on the Dow, after Deutsche Bank said the grocer is on track to gain market share through its e-commerce investments.
President Donald Trump also repeated a threat to impose tariffs on $267 billion worth of additional Chinese imports if Beijing retaliates to Washington`s recent levies.
The trade-sensitive industrials sector was down 0.94 percent. Caterpillar dropped 2.2 percent and airline stocks fell 1.83 percent after American Airlines` forecast.
American Airlines fell 4.3 percent after saying fuel prices were higher than expected in the third quarter, raising concerns that improving fares were not enough to offset energy costs.
The biggest decliner was the materials index, which tumbled 2.48 percent, weighed down by a drop in chemical companies after PPG`s results and paper packaging companies after BMO said a surge in containerboard supply could hit valuations.
PPG Industries sank 9.7 percent, after the specialty chemicals maker said its current-quarter profit would be hit by higher raw material costs and softer demand in China.
PPG was followed on the S&P by WestRock and Packaging Corp of America, both of which were down about 8 percent.
Advancing issues outnumbered decliners for a 1.26-to-1 ratio on the NYSE and a 1.19-to-1 ratio on the Nasdaq.
The S&P index recorded 14 new 52-week highs and 24 new lows, while the Nasdaq recorded 14 new highs and 73 new lows.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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