Big tech stocks bounce back after Facebook blackout
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By Shreyashi Sanyal
Wall Street's main indexes rose today as growth stocks bounced from a sharp sell-off, while economy-sensitive cyclical sectors of the market remained infavor ahead of closely watched monthly payrolls data later inthe week.
High-growth stocks including Apple, Amazon, Microsoft, Netflix andAlphabet rose between 0.4% and 3.3% in early trading.
Facebook was up 1.3% after taking a beating a day earlier, when its app and its photo-sharing platform Instagram were down for hours before being restored late in the evening.
Eight of the 11 major S&P 500 sectors were trading higher.Energy and technology led gains, while defensive utilities lagged in a sign that investors were gradually moving towards more risk-taking.
Other so-called value sectors including financials and banks also rose.
"It is impossible to get overly worried about these incredibly modest market declines, which are mostly concentrated in highly overpriced technology stocks," said David Bahnsen, chief investment officer at the Bahnsen Group.
"The energy sector... has outperformed the market during its most volatile period of the year by a wide margin. A rotation and shift in leadership is taking place during this recent boutof market volatility and this is not a mere risk off vs risk on story."
Most technology stocks were hammered on Monday as US Treasury yields ticked higher amid concerns about a potential US government debt default.
President Joe Biden said the federal government could breach its $28.4 trillion debt limit in a historic default unless Republicans join Democrats in voting to raise it in the two next weeks.
Investors are now looking ahead to the release of September employment data on Friday that could pave the way for the tapering of the US Federal Reserve's asset purchase program.
Adding to bets on further tightening of monetary policy was recent data, which showed increased consumer spending, accelerated factory activity and elevated inflation growth.
Data from the Institute for Supply Management said US services industry activity nudged up in September, as its non-manufacturing activity index edged up to a reading of 61.9 last month from 61.7 in August.
The S&P index recorded 10 new 52-week highs and five new lows, while the Nasdaq recorded 38 new highs and 65 new lows. (Reporting by Shreyashi Sanyal and Devik Jain in Bengaluru) - Reuters