The Nasdaq today led the market higher, as technology and internet stocks rallied and helped the indexes extend their rebound.
XAfter a 1.1% rise Tuesday, the Nasdaq added another 1.1% Wednesday. The S&P 500 rose 0.6%. Both indexes closed near session highs after erasing early losses, and both are close to regaining the 50-day moving averages.
The Dow Jones Industrial Average climbed 0.5% and is finding support at the 200-day moving average. Small caps, a lagging part of the market, underperformed. The Russell 2000 added 0.4%, with financial and consumer staples down the most in the Russell.
Early data showed volume fell on the Nasdaq and was nearly unchanged on the NYSE. Advancing stocks led decliners by a 2-1 ratio on the NYSE and by 9-to-7 on the Nasdaq.
The market this month is moving primarily on news over the U.S.-China trade war, and Wednesday brought hopeful headlines. The Trump administration plans to delay tariffs on auto imports by up to six months, reports said.
Technology, communications services, consumer staples and real estate were Wednesday's best-performing sectors. But retailers and financials were lower.
Communication Services Select Sector SPDR Fund (XLC) jumped 2.2%, thanks to rebounds in the two largest components.
Alphabet, Facebook Rally
Alphabet (GOOGL) soared 4% and made a quick return back above its 200-day line in active trading. Deutsche Bank raised the price target on Alphabet stock to 1,400 from 1,300 and kept a buy rating on the parent company of Google. Alphabet closed at 1,170.80.
Facebook (FB) climbed more than 3% after finding support at the 50-day moving average. The stock is forming a large cup-with-handle base with a 198.58 buy point.
But retail was broadly weaker after U.S. retail sales in April fell 0.2%, well below a consensus forecast for a 0.2% increase. Furnishings, auto parts and apparel-store groups were in the bottom 20 of 197 industry groups. Walmart (WMT), the nation's largest retailer, fell 0.2% and was one of the weakest Dow components.
Banks and other financials fell broadly, especially regional banks. The Treasury yield curve inverted again, with the 10-year yield falling below the three-month yield. Investors view yield inversions as warning sign of a recession. The inversion makes it harder for banks to make money on the difference between yields. It also comes with Wall Street jittery about an all-out trade war.
Juan Carlos Arancibia is the markets editor of IBD and oversees market coverage. Follow him at @IBD_jarancibia
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