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Bargain-hunting buoys Wall Street after Nasdaq correction

Stock MarketsJan 20, 2022 14:24
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© Reuters. FILE PHOTO: The Nasdaq logo is displayed at the Nasdaq Market site in Times Square in New York City, U.S., December 3, 2021. REUTERS/Jeenah Moon/File Photo

By Lewis Krauskopf, Bansari Mayur Kamdar and Shreyashi Sanyal

(Reuters) - Wall Street's main indexes rebounded on Thursday with solid gains for technology and growth shares as Treasury yields steadied and investors sought bargains a day after the Nasdaq fell into correction territory.

All 11 major S&P 500 sectors were higher. Megacap stocks gave the biggest individual boosts to the S&P 500, with Microsoft (NASDAQ:MSFT) up 1.7% and Tesla (NASDAQ:TSLA) up 3.8%.

Stocks were regaining some ground after a steep sell-off to start the week, with the Nasdaq on Wednesday closing 10.7% below its November all-time high, confirming it was in a correction.

“The fact that the Nasdaq had dipped into correction territory probably brought in some buyers who felt as though it had gotten overdone,” said David Joy, chief market strategist at Ameriprise Financial (NYSE:AMP).

The Dow Jones Industrial Average rose 267.62 points, or 0.76%, to 35,296.27, the S&P 500 gained 40.77 points, or 0.90%, to 4,573.53 and the Nasdaq Composite added 175.69 points, or 1.23%, to 14,515.94.

Putting a damper on Thursday's rebound for growth stocks, shares of Peloton Interactive tumbled 15% after CNBC reported that the exercise bike maker is pausing production of its connected fitness products as demand wanes and the company looks to control costs. Peloton was one of the mainstays of the stay-at-home trade in 2020.

Stocks have gotten off to a rocky start in 2022, as a fast rise in Treasury yields amid concerns the Federal Reserve will become aggressive in controlling inflation has particularly hit tech and growth shares. The benchmark S&P 500 is down about 4% so far this year.

Treasury yields were relatively steady on Thursday, after dropping from two-year highs on Wednesday.

“Just the fact that they have not gone any higher... at least for the day it's a welcome reprieve from the steady march higher that we have experienced,” Joy said.

Investors are also turning to fourth-quarter earnings reports as they start to roll in.

Shares of Travelers (NYSE:TRV) Cos rose 4.9% after the property and casualty insurer reported a record quarterly profit.

Baker Hughes shares rose 4.5% after the company reported an adjusted quarterly profit and topped analysts' earnings expectations as higher energy prices fuel demand for its equipment and services.

Streaming giant Netflix (NASDAQ:NFLX) was set to report after market close on Thursday, in one of the early reports for big growth companies.

Data on Thursday showed the number of Americans filing new claims for unemployment benefits unexpectedly rose last week, likely as a winter wave of COVID-19 infections disrupted business activity.

Advancing issues outnumbered declining ones on the NYSE by a 2.41-to-1 ratio; on Nasdaq, a 2.05-to-1 ratio favored advancers.

The S&P 500 posted 11 new 52-week highs and one new low; the Nasdaq Composite recorded 15 new highs and 162 new lows.

Bargain-hunting buoys Wall Street after Nasdaq correction
 

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