NEW YORK: Wall Street’s main indexes rallied on Wednesday to stanch the bleeding after a three-day drop as investors jumped back in to take advantage of the repricing in technology-related stocks, a day after the Nasdaq confirmed correction territory.
Tesla Inc shares jumped 7.7% after suffering their biggest one-day percentage drop in the prior session, while Apple Inc, Microsoft Corp and Amazon.com Inc – the top three U.S. public companies by market capitalization – each rose by at least 4%.
Other stay-at-home winners such as Facebook Inc and Google-parent Alphabet Inc also climbed, a day after the tech-heavy Nasdaq ended 10% below its Sept. 2 record closing high, commonly known as a correction.
“Call off the five-alarm fire, it’s not here,” said Peter Kenny, founder, Kenny’s Commentary LLC and Strategic Board Solutions LLC in Denver.
“It is very important to realize those mega-cap names have pulled the market higher and higher, so far out of range as of last week that the market did have to come back in to some sort of reversion to the mean.”
Kenny said the Nasdaq’s ability to hold its 50-day moving average, a technical support level, was key in reversing the market’s direction.
Tiffany & Co tumbled 6.2% after French luxury goods giant LVMH warned it was set to walk away from its planned $16 billion takeover of the U.S. jeweler.
Advancing issues outnumbered declining ones on the NYSE by a 3.24-to-1 ratio; on Nasdaq, a 2.19-to-1 ratio favored advancers.
The S&P 500 posted 2 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 30 new highs and 20 new lows.