Wall Street regains footing as tech shares recover

(Reuters) – U.S. stocks recovered from a brutal two-day selloff on Wednesday as strong earnings from Foot Locker and gains in technology stocks lifted investor sentiment ahead of the Thanksgiving holiday.

Foot Locker Inc shares surged 15.4 percent after the footwear retailer’s quarterly same-store sales trumped expectations and boosted other sports retailers with Dick’s Sporting Goods Inc and Hibbett Sports Inc rising about 3 percent.

Shares of Nike Inc, a Foot Locker supplier, gained 1.6 percent.

Gap Inc rose 3.5 percent, reversing earlier losses after a number of Wall Street brokerages said the company’s planned closure of underperforming stores could eliminate significant losses.

Both, Foot Locker and Gap helped boost the S&P consumer discretionary index, making it the top gainer among the 11 major S&P indexes.

The pressure on technology stocks appeared to have eased on Wednesday, with the FAANG group — Facebook Inc, Apple Inc, Amazon.com Inc, Netflix Inc and Alphabet Inc – gaining between 0.2 percent and 3 percent.

Autodesk Inc jumped 9.3 percent after the software company reported third-quarter results ahead of analysts’ estimates and announced an $875 million deal to buy cloud-based software company PlanGrid.

Autodesk was the top gainer in the S&P technology sector, which was up 0.9 percent after three days of declines.

“Equity markets are finding some footing after two days of steep decline. It’s probably a reaction to over-sold condition,” said Emily Roland, head of capital markets research, John Hancock Investments.

A report by MNI saying that the Fed may pause its rate hiking cycle as early as spring could also be supporting the markets, Roland added.

“Any signs that the Fed is more dovish than the investors have expected is going to be a positive for risk assets.”

At 10:59 a.m. ET the Dow Jones Industrial Average was up 107.36 points, or 0.44 percent, at 24,573.00, the S&P 500 was up 17.74 points, or 0.67 percent, at 2,659.63 and the Nasdaq Composite was up 79.74 points, or 1.15 percent, at 6,988.56.

The S&P energy index gained 1.2 percent as oil prices bounced back from a 6 percent plunge the previous day. [O/R]

Worries about slowing global growth and peaking corporate earnings have sapped risk appetite in recent months, throwing into doubt the longevity of the decade-old bull run for stocks.

Nasdaq closed at its lowest level in over seven months on Tuesday, while the S&P 500 and the blue-chip Dow erased all their gains for the year.

Latest economic data showed new orders for key U.S.-made capital goods were unexpectedly unchanged in October and shipments rebounded modestly, which could temper expectations of an acceleration in business spending on equipment early in the fourth quarter.

“This is a sign that the economy is adjusting to higher rates here. The pace of the economic growth is slowing, but the U.S. economy by no means is falling off a cliff here,” said Roland.

Advancing issues outnumbered decliners for a 4.25-to-1 ratio on the NYSE and a 3.39-to-1 ratio on the Nasdaq.

The S&P index recorded four new 52-week highs and two new lows, while the Nasdaq recorded seven new highs and 48 new lows.

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