(Reuters) – The S&P 500 and Dow industrials ended slightly negative but well above their session lows in volatile trading on Thursday as the arrest of a Chinese technology executive fanned fears of U.S-China tensions over trade, while some beaten-up big technology and internet shares posted gains.
Following a rare midweek U.S. trading holiday, stocks tumbled at the outset of the trading, with the benchmark S&P 500 dropping as much as 2.9 percent. But from midday stocks began paring their losses and the tech-heavy Nasdaq ended in positive territory.
“The market had gotten way oversold,” said Gary Bradshaw, senior vice president and portfolio manager at Hodges Capital Management in Dallas. “Investors looked up and saw they could buy good companies at much cheaper valuations than they could a couple of months ago.”
The initial selling followed news that the chief financial officer of telecom equipment maker Huawei Technologies had been arrested in Canada and faced extradition to the United States.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., December 6, 2018. REUTERS/Brendan McDermid
The arrest came as investor enthusiasm had already faded following a truce reached over the weekend in talks between the United States and China, which had prompted some hope about resolving differences over trade that have clouded the stock market’s outlook this year.
“You have got the news overnight of the arrest of the CFO of Huawei that I think is throwing a real monkey wrench into the positive optimism that surrounded the weekend meeting,” said Katie Nixon, chief investment officer for the wealth management division of Northern Trust in Chicago.
Stocks seemed to gain further support from a report in the Wall Street Journal that Federal Reserve officials are considering whether to signal a new wait-and-see mentality after a