Dow rises 100 points at the open as tech shares try to rebound from last week’s steep losses

Stocks opened higher on Monday as tech shares tried to rebound from sharp losses in the previous week.

The Dow Jones Industrial Average rose more than 100 points as Nike and Home Depot outperformed. The S&P 500 gained 0.4 percent as tech rose 0.2 percent. The Nasdaq Composite advanced 0.3 percent as Amazon and Alphabet climbed.

The S&P 500 tech sector dropped nearly 3 percent last week as investors grappled with the possibility of stronger regulation for social media companies.

The Justice Department said last week Attorney General Jeff Sessions will meet with state attorneys general later in September to discuss worries surrounding tech companies that “may be hurting competition and intentionally stifling the free exchange of ideas on their platforms.”

A decline in semiconductor shares also pressured tech. The VanEck Vectors Semiconductor ETF (SMH) dropped 2.9 percent last week.

Spencer Platt | Getty Images News | Getty Images

“Selling pressure has been exacerbated by the concentration of high momentum technology stocks in a multitude of exchanges traded funds,” said Marc Chaikin, CEO of Chaikin Analytics, in a note. “Once the sell orders come in from trend followers, these ETFs must sell all the stocks in the basket, regardless of fundamentals or liquidity.”

Chaikin also said, however, these pullbacks are buying opportunities for investors. While it is true that trees don’t grow to the sky, most of the leaders in the tech sector such as Adobe (ADBE), Apple (AAPL), Amazon (AMZN), Alphabet (GOOGL), Salesforce.com (CRM) and Visa (V) are in the midst of a robust revenue and earnings surge.”

Amazon shares rose 0.8 percent, while Alphabet’s stock climbed 0.4 percent. Netflix, meanwhile, rose 0.4 percent.

But worries around global trade remain. Canada and the U.S. have yet to secure a final deal that would replace the North American Free Trade Agreement (NAFTA). President Donald Trump also told reporters last week the U.S. and Japan had begun talks over trade.

Trump also said Friday that he was “ready to go” on hitting Chinawith an additional $267 billion worth of tariffs. The U.S. administration is already looking into finalizing plans that would inflict tariffs on $200 billion worth of Chinese goods, after a public comment period expired recently.

This entry was posted in Markets. Bookmark the permalink.

Leave a Reply