Nasdaq Jumps 1.1 Percent as Tech Stocks Rebound After Worst Week Since June

Tech stocks led a rebound on Wall Street on Monday, October 19, after the selloff on Friday, October 16, capped the Nasdaq Composite's worst week since June.

The Nasdaq rose 290.85 points, or 1.11 percent, to 26,430.89, The Wall Street Journal and dpa-AFX reported. The S and P 500 climbed 31.29 points, or 0.41 percent, to 7,690.73. The Dow Jones Industrial Average bucked the move and edged down 36.38 points, or 0.07 percent, to 51,966.03.

A rebound led by tech, not by the broad market

The headline gains hid weak participation. The S and P 500 opened at 7,702.77, reached 7,731.18, and then gave back ground to close 12.04 points below its open, TS2 reported. In a snapshot at 3:59 p.m. Eastern, 324 of the 503 stocks in the index were falling and only 176 were advancing. Technology was the only sector with a positive average stock return, up 1.33 percent on average, while the other 10 sector groups averaged losses.

Sector indexes told the same split story. Computer hardware stocks were among the strongest, with the NYSE Arca Computer Hardware Index up 2 percent after it closed at a two month low on Friday, dpa-AFX reported. Semiconductor stocks rose too, with the Philadelphia Semiconductor Index up 1.6 percent. Retail stocks rose, with the Dow Jones U.S. Retail Index up 2.2 percent to its highest close in well over a month. Telecom stocks fell, with the NYSE Arca North American Telecom Index down 2 percent, and utilities, brokerage and airline stocks also fell.

Traders said worries eased that firms chasing the artificial intelligence boom had borrowed too much, and attention shifted to AI earnings due in the days ahead, The Wall Street Journal reported. Bargain hunting after the Nasdaq fell to its lowest close in a month also helped tech, dpa-AFX reported.

Yields rose and homebuilder sentiment fell

Bond yields rose during the session. The yield on the 10 year Treasury note rose to 5.135 percent, its largest gain since October 2, The Wall Street Journal reported, citing Dow Jones Market Data. TS2 put the 10 year yield at 5.15 percent, up 6 basis points. The 30 year yield rose to 5.472 percent.

On the economic front, homebuilder sentiment fell more than expected in October. The National Association of Home Builders and Wells Fargo housing market index fell to 29 in October from 32 in September, dpa-AFX reported. Economists had expected a reading of 31. Reuters reported the index dropped three points to 29, the lowest level since June 2012.

Oil also moved. The expiring November oil futures contract in New York rose 2.25 dollars, or 2.2 percent, to 103.66 dollars a barrel, The Wall Street Journal reported.

Friday's close set up Monday's move. On Friday, October 16, the Nasdaq fell 2.15 percent to 26,140.03, the S and P 500 lost 1.09 percent to 7,659.44, and the Dow eased 0.34 percent, according to figures reported for that session. For the full week, the Nasdaq lost about 4.5 percent. Monday's rise recovered only part of that loss, and the weak breadth showed investors bought a narrow group of tech names rather than the market as a whole.