Wall Street edges higher on tech boost

(Reuters) – The S&P 500 edged higher in volatile trading on Thursday as investors cautiously bought heavyweight tech-related stocks after a recent selloff while awaiting more coronavirus fiscal aid amid growing evidence of a choppy economic rebound.

Amazon.com rose 1.3% and Tesla Inc jumped 6%, supporting the Nasdaq’s advance. Stay-at-home winners Apple Inc, Microsoft Corp and Netflix Inc were marginally lower.

The NYSE FANG+TM Index, which includes the core FAANG stocks, was up 1.1%.

“It’s going to be a battle for the next couple of days from investors who are trying to pick spots to get back into technology and traders who are using some of these sharp rallies to profit take,” said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.

Wall Street’s main indexes bounced on Wednesday from their biggest three-day rout since March, as investors returned to tech-focused stocks that are deemed insulated from the current economic downturn.

The S&P tech index rose 0.1% and consumer discretionary added 1%. Despite the recent pullback, the tech index is up about 44% in 2020, far outperforming the benchmark S&P 500’s 13.5% rise in the same period.

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Many market participants are also viewing the selloff as a bout of turbulence rather than the start of a longer slide.

“If (the stock market) today closes up, even if they’re small gains, that’s going to give more confidence back to Wall Street participants to feel more comfortable to get back in,” said Robert Pavlik, chief investment strategist at SlateStone Wealth LLC in New York.

The CBOE volatility index fell further away from a near three-month high hit at the start of a historically tumultuous September. Investors have also remained cautious as data paints a mixed picture of U.S. economic health.

Initial claims for state unemployment benefits totaled a seasonally adjusted 884,000 for the week ended Sept. 5, matching the number of applications received in the prior week as layoffs and furloughs persisted across industries.

A separate report showed U.S. producer prices rose slightly more than expected in August as the cost of services increased solidly, while underlying producer inflation continued to firm.

The U.S. Senate was set to vote later in the day on a significantly scaled back Republican coronavirus relief bill in what could be the final vote on fiscal aid in Congress before the Nov. 3 presidential and congressional elections. At 11:36 a.m. ET, the Dow Jones Industrial Average was up 10.35 points, or 0.04%, at 27,950.82, the S&P 500 was up 3.20 points, or 0.09%, at 3,402.16. The Nasdaq Composite was up 50.23 points, or 0.45%, at 11,191.80. Energy stocks dropped 1.2% as oil prices extended losses after U.S. data showed a surprise build in crude stockpiles last week and on forecasts for lower global oil demand. [O/R]

Advancing issues outnumbered decliners by a 1.06-to-1 ratio on the NYSE and by a 1.20-to-1 ratio on the Nasdaq.

The S&P index recorded six new 52-week highs and one new low, while the Nasdaq recorded 36 new highs and 16 new lows.

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