Stocks Bounce After Extended Selloff, Led by Tech Sector

By Michael Wursthorn and Christopher Whittall Features Dow Jones Newswires

Technology companies led a broad upswing in U.S. stocks Tuesday, as investors scooped up shares following recent declines.

Continue Reading Below

The Dow Jones Industrial Average rose for a second straight day after the index suffered its biggest two-week decline of the year. Threats between the U.S. and North Korea, as well as turbulence in Washington that amplified investors' doubts about the Trump administration's ability to enact agenda items like a tax overhaul, have weighed on stocks this month.

Some of Tuesday's biggest gainers were stocks that were hit hard in recent sessions, including shares of brick-and-mortar retailers and tech giants.

While the political climate continued to be a concern, investors said the strong earnings quarter, steady economic growth and slightly more attractive valuations following recent selloffs were driving markets.

"We're focusing less and less on the political backdrop," said Lew Piantedosi, director of growth equity for Eaton Vance. "It's the strength of the economy, not just here, but globally, that matter most to stocks. Earnings have been reasonably healthy for the last few quarters, too."

The Dow Jones Industrial Average gained 196 points, or 0.9%, to 21900. The S&P 500 added 1%, and the Nasdaq Composite rose 1.4%.

Continue Reading Below

Technology companies in the S&P 500 rose 1.5%. Western Digital added 3.3%, Cisco Systems -- which shed 4% in Thursday's selloff -- rose 1.9% Tuesday and Google parent Alphabet added 2.1%.

Retailers were on the upswing, too. Shares of Macy's gained 4.6% after the company said it hired a senior eBay executive and streamlined its top management. Shoe retailer DSW rose 17% after it posted same-store sales growth for the first time in six quarters. The SPDR S&P Retail exchange-traded fund rose 1.5% after declining 3.7% last week.

Shares of energy companies in the S&P 500 rose 0.7%, with Oneok and Cabot Oil & Gas posting some of the biggest advances.

U.S. crude for September gained 0.6% to $47.64 a barrel.

Investments considered to be relatively safe stores of value, including gold and U.S. Treasury bonds, retreated.

Government bond prices edged lower, with the yield on the 10-year U.S. Treasury note rising to 2.215% from 2.182% on Monday. Yields rise as prices fall. Gold for August delivery fell 0.4% to $1,285.10 a troy ounce -- its biggest decline in a week.

Investors also were looking ahead to the Jackson Hole economic symposium that kicks off Thursday, where the roster of top central bankers is set to include Federal Reserve Chairwoman Janet Yellen and European Central Bank President Mario Draghi.

Investors are watching for further details on the Fed's plans to scale back its balance sheet and clues on when the ECB could trim its asset purchases, which have helped underpin markets in recent years.

"We've been conditioned to expect something out of Jackson Hole each year," said Krishna Memani, OppenheimerFund's chief investment officer. "If there is a surprise, it'll come from [Mr.] Draghi."

Stocks beyond the U.S. were mostly higher Tuesday. The Stoxx Europe 600 rose 0.8%, buoyed by gains in mining shares. Stock markets in the Asia-Pacific region mostly pushed higher, but Japan's Nikkei Stock Average slipped less than 0.1%, notching its 11th decline in 13 trading sessions.

Write to Michael Wursthorn at Michael.Wursthorn@wsj.com and Christopher Whittall at christopher.whittall@wsj.com

(END) Dow Jones Newswires

August 22, 2017 16:24 ET (20:24 GMT)