The year started strong, but early gains evaporated as the markets entered a correction over interest rate jitters, fears of an escalating import tariff dispute between the United States and China, and a selloff in the tech sector.
Tech stocks reversed course on Thursday and the S&P 500 information technology index <.SPLRCT> closed up 2.2 percent after reaching a session high of 3.2 percent, helping push the S&P 500 up 1.4 percent, with the Dow and Nasdaq also rallying.
"All the fears now look overblown. Interest rates, the concern about tariffs, we're going to get into a trade war," said Doug Cote, chief market strategist at Voya Investment Management in New York. "But now clearer heads are prevailing. If anything this is a buying opportunity."
Technology gains were led by Facebook
"Tech will always lead the charge in a bull market. And we're in a bull market," said Cote.
The Dow Jones Industrial Average rose 254.69 points, or 1.07 percent, to close at 24,103.11, the S&P 500 gained 35.87 points, or 1.38 percent, to 2,640.87 and the Nasdaq Composite added 114.22 points, or 1.64 percent, to 7,063.45.
Investors were unfazed by economic reports showing a slight increase in consumer spending and initial jobless claims dropping to a more than 45-year low.
In other data, core personal consumption expenditures (PCE) rose by 1.6 percent year-on-year. The index, the Federal Reserve's preferred measure of inflation, has been below the U.S. central bank's 2 percent target since mid-2012.
Stocks shot up earlier in the week as comments from officials in the United States and China suggested the world's two largest economies would renegotiate tariffs and trade imbalances, averting a trade war.
But worries that retaliatory tariffs would harm the global economy led investors to cut equity exposure to a four-month low in March and reduce holdings of U.S. stocks to the lowest in nearly two years, according to a Reuters poll.
Advancing issues outnumbered declining ones on the NYSE by a 3.66-to-1 ratio; on Nasdaq, a 2.23-to-1 ratio favored advancers.
Volume on U.S. exchanges was 7.49 billion shares, compared to the 7.29 billion average over the last 20 trading days.- Reuters
Did you find this article insightful?