U.S. stocks staged a late-day comeback on Thursday, boosted by economic comeback plays as the market rebounded from a two-day losing streak.
The S&P 500 closed 0.5% higher at 3,909.52, wiping out a 0.9% intraday loss. The Dow Jones Industrial Average gained 199.42 points, or 0.6%, to 32,619.48 after losing as much as 348 points. The Nasdaq Composite also eked out a 0.1% gain to close at 12,977.68 as some major technology stocks reserved losses. Tesla rose 1.6%, while Apple closed in the green.
Stocks that are tied to a successful economic reopening such as airlines and cruise line operators led the intraday rebound. American Airlines and United gained more than 4% each, while Norwegian Cruise Line and Carnival both rose over 2%. Boeing climbed 3.3%.
The market experienced some weakness earlier in the day as Federal Reserve Chairman Jerome Powell hinted at one day starting to remove the stimulus that has boosted the market during the pandemic.
“As we make substantial further progress toward our goals, we’ll gradually roll back the amount of Treasurys and mortgage-backed securities we’ve bought,” Powell told NPR’s “Morning Edition.” “We will very gradually over time and with great transparency, when the economy has all but fully recovered, we will be pulling back the support that we provided during emergency times.”
Thursday’s moves pared the major averages’ week-to-date losses. The S&P 500 and the Dow are now down less than 0.1% each after hitting their record highs last week. The Nasdaq underperformed with a 1.8% loss this week.
Some investors have been taking profits in their growth winners which led the market’s rebound from the pandemic losses last year. Netflix has fallen 6.7% this month, while Tesla is down more than 5%. Pandemic winner Zoom Video has dropped nearly 16% in March.
“The weakness in technology stocks is undeniable, but it likely won’t be a straight line down for the sector and there will be zigs and zags along the way,” said David Bahnsen, chief investment officer at The Bahnsen Group. “Tech stock valuations are too high and are screaming for a correction.”
Investors pored over a better-than-expected reading on weekly jobless claims. The Labor Department said first-time claims for unemployment insurance totaled 684,000 for the week ended March 20, lower than an estimate of 735,000 from economists surveyed by Dow Jones.
“The signs of strength from today’s jobless claims read may actually have a perverse effect on the broader market,” said Mike Loewengart, managing director of investment strategy at E-Trade. “Meaning that if we continue to see the labor market make strides, this could translate into pressure on equities and on the Fed to reassess its accommodative stance.”
Oil prices fell more than 4% Thursday as demand concerns rekindled with fresh coronavirus pandemic lockdowns.
The 10-year Treasury yield gained just 1 basis point to 1.64%. The benchmark rate hit a 14-month high last week above 1.7%.
