Wall Street ends higher as tech rally squashes virus fears, but S&P down for week

(Reuters) – Technology stocks again rode to Wall Street’s rescue on Friday, lifting the main indexes more than 1%, but the Dow and the S&P 500 still posted their longest weekly losing streaks in a year as fears of a slowing economy sparked an almost month-long rout.

Investors started buying beaten-down shares after the Nasdaq confirmed a corrective phase earlier this month and the S&P 500 on an intra-day basis briefly broke that barrier this week.

Both the Dow and S&P 500 notched their fourth straight weekly declines, the longest weekly losing streak since August 2019. The Nasdaq closed higher for the week after falling the previous three, and is now up 22% for the year. The S&P 500 is up a bit more than 2% for the year.

Investors are looking at the long term and believe technology remains the investment of choice, said Edward Moya, senior market analyst at OANDA in New York.

“It’s dip buying,” Moya said. “When you look at the correction that we’ve seen in these tech giants, people are still going to want to hold U.S. equities. The reality is that 2021 is going to be a much higher stock market and you’re probably going to see tech still lead the way.”

Shares of tech mega-caps Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O led the way, followed by Nvidia Corp NVDA.O and Facebook Inc FB.O, rising at least 2.1%.

The information technology index .SPLRCT jumped 2.4% as investors ditched value-linked stocks .IVX on signs of a slowdown in the broader economic recovery. Growth-oriented shares .IVX gained at a rate almost twice that of value stocks.

Volatility .VIX has also shot up as investors look for clarity on whether Congress will approve more stimulus ahead of the Nov. 3 presidential election, which now appears unlikely.

The CBOE Market Volatility Index .VIX, known as Wall’s fear gauge, fell 7.68%.

FILE PHOTO: Traders wearing masks work, on the first day of in person trading since the closure during the outbreak of the coronavirus disease (COVID-19) on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 26, 2020. REUTERS/Brendan McDermid

“You’ve had this nice recovery through the summer, and coming into the fall the economy is just a little bit more vulnerable, particularly with a lot of the stimulus that we had starting to taper off now,” said Mike Dowdall, portfolio manager at BMO Global Asset Management in Chicago.

The Dow Jones Industrial Average .DJI rose 358.52 points, or 1.34%, to 27,173.96. The S&P 500 .SPX gained 51.87 points, or 1.60%, to 3,298.46 and the Nasdaq Composite .IXIC added 241.30 points, or 2.26%, to 10,913.56.

For the week, the Dow unofficially fell 1.74%, the S&P 500 slid 0.63%, and the Nasdaq gained 1.1%.

Volume on U.S. exchanges was 8.89 billion shares,

The S&P industrials sector .SPLRCI rose 1.49% as data showed new orders for key U.S.-made capital goods jumped in August, while a 0.06% slide in energy stocks .SPNY gave them their worst week since mid-June.

Cruise liners Royal Caribbean Cruises Ltd RCL.N, Norwegian Cruise Line NCLH.N and Carnival Corp CCL.N jumped 7.7% or more after Barclays upgraded their shares to “overweight.”

Shares of Boeing Co BA.N rose 6.8% and led the Dow higher after the U.S. Federal Aviation Administration said its chief will conduct an evaluation flight of the grounded 737 MAX and European safety regulators indicated a potential resumption of flights by year end.

Costco Wholesale Corp COST.O fell 1.27% as the warehouse chain recorded high coronavirus-related costs for a second straight quarter.

Novavax Inc NVAX.O jumped 10.9% after the drugmaker launched a late-stage trial of its experimental COVID-19 vaccine in the UK.

The number of coronavirus cases in the U.S. topped 7 million, as Midwest states reported spikes in COVID-19 infections in September, according to a Reuters tally.

Advancing issues outnumbered declining ones on the NYSE by a 2.30-to-1 ratio; on Nasdaq, a 2.94-to-1 ratio favored advancers.

The S&P 500 posted one new 52-week high and no new lows; the Nasdaq Composite recorded 26 new highs and 49 new lows.

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