US close: Markets bounce back strongly as tech stocks jump
US stocks rebounded strongly from recent losses to end the week on a high, with tech stocks leading the surge as investors hunted for bargains after the Nasdaq slumped to a five-week low the previous session.
Sentiment was boosted by better-than-expected manufacturing data, and dovish comments from a Federal Reserve policymaker.
The Dow closed the day up 0.8% following four days in the red; while the S&P 500 and Nasdaq surged 1.3% and 1.8% respectively, ending their five-day losing streak. On Thursday, the Nasdaq settled at 19,280.79 – its lowest level since 29 November.
In economic data, US manufacturing activity contracted for the ninth consecutive month in December, though at a slower pace. The Institute for Supply Management’s purchasing managers’ index rose to 49.3 from November’s 48.4, just shy of the 50-point threshold that separates contraction from expansion. This was comfortably ahead of the consensus forecast of 48.4.
Oxford Economics said the data shows the sector is starting to gain positive momentum. "While the index remains in contractionary territory, improved new orders, low customer inventories, and the potential for tariffs to pull forward additional demand should sustain the positive momentum over the near term," said Matthew Martin, senior US economist at the firm.
In other news, comments from the Richmond Fed boss, Thomas Barkin, were making headlines after he told an audience in Maryland that he anticipates more upside than downside economic surprises on the growth front.
Barkin added that, while inflation wasn't yet back to target, he did not believe that it was necessary to "be nearly as restrictive as we once were to finish the job".
Oil prices surged once again, with WTI crude rising 1.3% to $74.07 a barrel on the back of a 2% surge on Thursday. WTI crude now sits at levels not seen since mid-October.
Market movers
Blue chip tech stocks were in demand, providing a big lift to markets, with Amazon.com, Tesla, Nvidia, Broadcom, Microsoft and Alphabet all putting in decent gains.
US Steel shares dropped 7% after president Joe Biden intervened to block Japan Nippon Steel's $14.9bn bid for the American industrial group, citing national security concerns.
In the final weeks of his administration, Biden said that US Steel will remain "a proud American company" – though the company has warned it needs the $3bn investment pledged by its Japanese rival or it may have to power down some of its major mills.
Electric vehicle group Rivian surged 24% after reassuring investors with in-line production and delivery numbers for 2024. The stock dropped sharply last year on the back of missed production targets.
Alcohol producers were out of favour after the surgeon general called for changes to labels to highlight the increased risk of seven types of cancer from alcohol consumption. Molson Coors and Constellation Brands both fell, along with US-listed shares of Diageo and AB InBev.
Dow Jones - Risers
Walgreens Boots Alliance, Inc. (WBA) $9.50 3.37%
Unitedhealth Group Inc. (UNH) $512.77 1.68%
Intel Corp. (INTC) $20.56 1.68%
American Express Co. (AXP) $303.13 1.56%
JP Morgan Chase & Co. (JPM) $243.28 1.37%
International Business Machines Corporation (CDI) (IBM) $222.59 1.23%
Microsoft Corp. (MSFT) $423.35 1.14%
Caterpillar Inc. (CAT) $363.81 1.12%
Goldman Sachs Group Inc. (GS) $579.98 0.90%
Walmart Inc. (WMT) $90.78 0.87%
Dow Jones - Fallers
Boeing Co. (BA) $169.90 -1.15%
Procter & Gamble Co. (PG) $165.13 -0.51%
Nike Inc. (NKE) $73.31 -0.49%
Cisco Systems Inc. (CSCO) $58.86 -0.41%
Dow Chemical Co. (DOW) $39.37 -0.38%
Apple Inc. (AAPL) $243.36 -0.20%
Coca-Cola Co. (KO) $61.76 -0.15%
Merck & Co. Inc. (MRK) $99.18 -0.03%
S&P 500 - Risers
Nektar Therapeutics (NKTR) $1.10 14.46%
NRG Energy Inc. (NRG) $98.46 6.20%
FMC Technologies Inc. (FTI) $31.35 6.02%
Nvidia Corp. (NVDA) $144.47 4.45%
Advanced Micro Devices Inc. (AMD) $125.37 3.93%
Humana Inc. (HUM) $262.50 3.89%
Illumina Inc. (ILMN) $136.01 3.88%
Applied Materials Inc. (AMAT) $170.06 3.78%
Lam Research Corp. (LRCX) $75.11 3.69%
Western Digital Corp. (WDC) $64.07 3.56%
S&P 500 - Fallers
Dollar Tree Inc (DLTR) $73.36 -4.07%
Advance Auto Parts (AAP) $46.33 -3.74%
Molson Coors Beverage Co. Class B (TAP) $55.33 -3.37%
Celanese Corp. (CE) $66.21 -3.35%
Best Buy Co. Inc. (BBY) $83.67 -2.96%
Carnival Corp. (CCL) $24.38 -2.52%
Brown Forman Corp. Class B (BF.B) $36.25 -2.50%
Estee Lauder Co. Inc. (EL) $72.19 -2.46%
Adobe Systems Inc. (ADBE) $430.57 -2.37%
Leggett & Platt Inc. (LEG) $9.35 -2.19%
Nasdaq 100 - Risers
Tesla Inc (TSLA) $410.44 8.22%
Nvidia Corp. (NVDA) $144.47 4.45%
Trip.com Group Limited (TCOM) $67.60 4.37%
Mercadolibre Inc. (MELI) $1,834.17 3.92%
Illumina Inc. (ILMN) $136.01 3.88%
Applied Materials Inc. (AMAT) $170.06 3.78%
Lam Research Corp. (LRCX) $75.11 3.69%
Western Digital Corp. (WDC) $64.07 3.56%
Walgreens Boots Alliance, Inc. (WBA) $9.50 3.37%
JD.com, Inc. (JD) $35.34 3.24%
Nasdaq 100 - Fallers
Dollar Tree Inc (DLTR) $73.36 -4.07%
Adobe Systems Inc. (ADBE) $430.57 -2.37%
Liberty Global plc Series C (LBTYK) $13.33 -1.84%
Check Point Software Technologies Ltd. (CHKP) $181.40 -1.72%
Liberty Global plc Series A (LBTYA) $12.90 -1.68%
eBay Inc. (EBAY) $61.61 -1.06%
DENTSPLY Sirona Inc. (XRAY) $18.62 -0.69%
Netflix Inc. (NFLX) $881.05 -0.64%
Wynn Resorts Ltd. (WYNN) $83.32 -0.57%
Kraft Heinz Co. (KHC) $30.61 -0.52%