(Reuters) – Wall Street rallied on Thursday as beaten-down technology shares gained favor after data showing a surge in the sale of new homes revived faith in the economic recovery even as U.S. jobless claims rose unexpectedly.
Nine of the 11 major S&P indexes were trading higher, with information technology .SPLRCT leading gains.
Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Nvidia Corp NVDA.O and Facebook Inc .FB.O, among stocks which have outperformed at a time of increased economic uncertainty, all rose at least 0.9%.
“Investors are going to be needing stocks that can weather a lower growth path because if we don’t get another round of fiscal stimulus, there’s not going to be a lot more we can do to continue boosting the economic recovery,” said Max Gokhman, capital markets strategist at Pacific Life Fund Advisors.
Waning hopes of more fiscal stimulus, signs of a faltering business recovery and a sell-off in technology-related shares have weighed on investors sentiment this month.
Wall Street started the day lower after the jobless claims data, with the S&P 500 briefly falling 10% below the intraday record peak it hit Sept. 2 for the second time in recent days. A close at that level would put the benchmark index in correction territory, joining the Nasdaq.
Dow constituents, considered a barometer of economic confidence, lagged the S&P 500 on Thursday as data showed 870,000 Americans applied for jobless benefits in the week ended Sept. 19, up from 866,000 in the previous week.
Homebuilders .SPHOME climbed 1.1% as sales of new single-family homes rose to their highest level in nearly 14 years in August. The Commerce Department report follows data this week showing sales of previously owned homes also near a 14-year high.
At 2:38 p.m. ET, the Dow Jones Industrial Average .DJI rose 181.32 points, or 0.68%, to 26,944.45. The S&P 500 .SPX gained 24.62 points, or 0.76%, to 3,261.54, and the Nasdaq Composite .IXIC added 96.89 points, or 0.91%, to 10,729.87.
The CBOE volatility index .VIX, known as Wall Street’s fear gauge and which is hovering near two-week highs, is expected to climb in the run-up to the quarter-end next week.
“The key is the VIX index, which has not yet reached levels that would suggest a continued strong move to the downside,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. “So you might get a day of bargain hunting followed by a day of selling, but as the last days of September come into place, we should begin to see some sort of window dressing by institutions.”
Nikola Corp NKLA.O, which is set for its biggest weekly decline ever, shed another 9.6% as Wedbush downgraded the stock to “underperform.”
Accenture Plc ACN.N fell 6.5% after the IT consulting firm forecast current-quarter revenue below expectations, while U.S.-listed shares of BlackBerry Ltd BB.N initially jumped after the Canadian security software firm posted a surprise rise in quarterly revenue.
Advancing issues outnumbered declining ones on the NYSE by a 1.32-to-1 ratio; on Nasdaq, a 1.04-to-1 ratio favored advancers.
The S&P 500 posted no new 52-week highs and two new lows; the Nasdaq Composite recorded nine new highs and 120 new lows.
Reporting by Herbert Lash; additional reporting by Sagarika Jaisinghani and Devik Jain in Bengaluru; Editing by Leslie Adler