By DAMIAN J. TROISE and ALEX VEIGA
AP Business Writers
Stocks marched higher on Wall Street in afternoon trading Tuesday as the technology sector reversed direction after a sell-off a day earlier.
The S&P 500 rose 1.3% as of 3:45 p.m. Eastern, erasing all of Monday’s loss. About 80% of the companies in the benchmark index rose. The Dow Jones Industrial Average rose 416 points, or 1.2%, to 34,418 and the tech-heavy Nasdaq rose 1.5%.
Technology stocks did much of the heavy lifting for the broader market. Chipmaker Nvidia rose 4% and Microsoft rose 2.2%. Communications stocks also made solid gains after losing ground a day prior. Netflix rose 5.8%.
The rally marks a reversal in the market’s broad trend lower in September, the S&P 500’s first monthly drop since January. The benchmark index has been mostly losing ground since it set an all-time on Sept. 2. It’s now near its 100-day moving average of 4,354, which sends a signal to traders that the index has reached “a good level of support for stocks to trade higher,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management.
“Today’s activity is primarily in response to the weakness we’ve experienced over the last 10 days or so,” he said. “We’re now on the doorstep of third-quarter releases, which in our view will show earnings are growing, and that’s a basis for stocks to trend higher.”
Bond yields gained ground. The 10-year Treasury rose to 1.53% from 1.49% late Monday. Rising bond yields helped lift banks, which rely on higher yields to charge more lucrative interest on loans. Bank of America rose 2.5%.
Energy prices continued rising. U.S. oil rose 1.7% to $78.93 per barrel. Natural gas futures jumped 9.5%. Rising energy prices have been steadily pushing gasoline prices higher. The average price for a gallon of gas in the U.S. is $3.20, up more than $1 from a year ago, according to AAA.
Chevron rose 1.5% and Hess rose 1.6%.
A wide range of companies that focus on consumer services gained ground following an encouraging update on the services sector, which is the largest part of the U.S. economy. The Institute for Supply Management reported that the sector continued growing in September and at a faster pace than economists expected. Chipotle rose 1.7% and Carmax gained 3.2%.
The market has been choppy for weeks as investors try to gauge how the economy will continue its recovery with COVID-19 and the highly contagious delta variant crimping consumer spending and job growth. Inflation concerns have been driving much of the up-and-down shifts for technology companies and the broader market.
Rising inflation has been prompting businesses from Nike to Sherwin-Williams to temper sales forecasts and warn investors that higher costs will hurt financial results. Supply chain disruptions and delays, along with rising raw materials costs, are among some of the key problems facing companies as they try to continue recovering from the pandemic’s impact.
The lingering pandemic and global supply chain problems have prompted the International Monetary Fund to trim its forecast for global growth this year.
Facebook rose 2.3%. The stock fell nearly 5% on Monday as the company suffered a worldwide outage and faced political fallout after a former employee told “60 Minutes” that the company has consistently chosen its own interests over the public good. The former employee, Frances Haugen, testified in front of Congress on Tuesday.
Stock markets in Europe rose, while markets in Asia were mostly lower.
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