Nasdaq rises on tech boost as economic recovery coolsNasdaq rises on tech boost as economic recovery cools
FILE PHOTO: A worker cleans the floor of the New York Stock Exchange (NYSE)

By Sagarika Jaisinghani and Devik Jain

(Reuters) – The Nasdaq led gains on Wall Street on Thursday as investors returned to technology-related stocks, while a surprise rise in weekly jobless claims signaled that more fiscal support would be necessary to avoid another round of mass layoffs and furloughs.

Nine of the 11 major S&P indexes were trading higher, with information technology among the biggest gainers.

Tech heavyweights Apple Inc, Inc, Netflix Inc, Nvidia Corp and Facebook Inc, which tend to outperform at a time of increased economic uncertainty, rose between 1.0% and 2.6%.

Waning hopes of more stimulus, signs of choppy economic growth and a sell-off in technology-related names have weighed on U.S. stocks this month.

The S&P 500 briefly fell 10% below its intraday record high hit on Sept. 2. If the benchmark index closes at that level, it will enter correction territory.

“The cloud of uncertainties continues to grow,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

“The coronavirus is now back on the front pages and the market is now really fearing the uncertainties of the elections. As we get closer to the end of the month, the downward trend is intensifying.”

The Labor Department’s most timely report on the economy showed 870,000 Americans applied for unemployment benefits in the week ended Sept. 19.

Job cuts have spread to industries such as financial services and technology that were not initially impacted by the mandated business closures in mid-March because of insufficient demand.

At 10:13 a.m. ET, the Dow Jones Industrial Average was up 0.20%, the S&P 500 was up 0.36% and the Nasdaq Composite was up or 0.59%.

The CBOE volatility index edged higher for the third time in four days.

“The key is the VIX index, which has not yet reached levels that would suggest a continued strong move to the downside,” Cardillo said.

“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.”

Big banks including Goldman Sachs Group Inc, Wells Fargo & Co and Morgan Stanley rose between 0.8% and 3.8%.

Nikola Corp, which is set for its biggest weekly declines ever, slumped another 13.7% as Wedbush downgraded the stock to “underperform”.

Accenture Plc fell 5.6% after the IT consulting firm forecast current-quarter revenue below expectations and missed estimates for fourth-quarter sales, hurt by lower spending from clients impacted by the COVID-19 pandemic.

U.S.-listed shares of BlackBerry Ltd jumped 9% after the Canadian security software firm posted a surprise rise in quarterly revenue, led by higher demand for its security software suite, Spark, and its QNX car software.

Declining issues outnumbered advancers 1.31-to-1 on the NYSE and the Nasdaq.

The S&P index recorded no new 52-week high and two new lows, while the Nasdaq recorded five new highs and 87 new lows.

(Reporting by Sagarika Jaisinghani and Devik Jain in Bengaluru; Editing by Arun Koyyur)