October 25, 2018

Wall Street rebounds after rout, Nasdaq +3.0%

Wall Street rebounded strongly on Thursday from the prior session’s rout, with tech shares leading a broad-based rally following a series of mostly good earnings reports.

The tech-rich Nasdaq Composite Index jumped 3.0 percent to 7,318.34, a day after the index suffered its biggest decline in seven years.

The Dow Jones Industrial Average gained 1.6 percent to 24,984.55, while the broad-based S&P 500 advanced 1.9 percent to 2,705.57.

Analysts said the gains were unsurprising after Wednesday’s ugly finale, especially after strong earnings from Microsoft, Tesla Motors and others reassured investors.

“We are seeing what we call a bottom fishing today,” said Howard Silverblatt, senior analyst at S&P Dow Jones Indices.

Major US indices lost more than two percent Wednesday in a bruising sell-off precipitated by fears over slowing corporate earnings growth.

Other issues that have pressured stocks include worries about rising US interest rates and uncertainty over the fallout from the murder of Saudi Arabian journalist Jamal Khashoggi.

Companies with big gains after earnings Thursday included Microsoft, which rebounded 5.8 percent, Tesla, up 9.1 percent, American Airlines, up 6.7 percent, Ford, up 10.0 percent and Twitter, up 15.5 percent.

“After a severe sell-off its perfectly normal to see the market rebound,” analyst Adam Sarhan said. “The key question: Is it a one-or two-day rally or is it a new trend?”