NEW YORK (Reuters) - Wall Street surged on Thursday, bringing an upbeat end to a tumultuous, holiday-shortened week as technology stocks rebounded, but the S&P 500 and the Dow Jones Industrial Average posted their biggest quarterly declines in more than two years.
The year started strong, but early gains evaporated as the markets entered a correction over interest rate jitters, fears of an escalating import tariff dispute between the United States and China, and a selloff in the tech sector.
Tech stocks reversed course on Thursday and the S&P 500 information technology index .SPLRCT closed up 2.2 percent after reaching a session high of 3.2 percent, helping push the S&P 500 up 1.4 percent, with the Dow and Nasdaq also rallying.
“All the fears now look overblown. Interest rates, the concern about tariffs, we’re going to get into a trade war,” said Doug Cote, chief market strategist at Voya Investment Management in New York. “But now clearer heads are prevailing. If anything this is a buying opportunity.”
“Tech will always lead the charge in a bull market. And we’re in a bull market,” said Cote.
The Dow Jones Industrial Average .DJI rose 254.69 points, or 1.07 percent, to close at 24,103.11, the S&P 500 .SPX gained 35.87 points, or 1.38 percent, to 2,640.87 and the Nasdaq Composite .IXIC added 114.22 points, or 1.64 percent, to 7,063.45.
Investors were unfazed by economic reports showing a slight increase in consumer spending and initial jobless claims dropping to a more than 45-year low.
In other data, core personal consumption expenditures (PCE) rose by 1.6 percent year-on-year. The index, the Federal Reserve’s preferred measure of inflation, has been below the U.S. central bank’s 2 percent target since mid-2012.
Amazon.com (AMZN.O) closed up 1.1 percent, recovering from a 4.6 percent drop after U.S. President Donald Trump criticized the online retailer via Twitter early Thursday, claiming without evidence that the company pays “little to no taxes to state & local governments.”
Stocks shot up earlier in the week as comments from officials in the United States and China suggested the world’s two largest economies would renegotiate tariffs and trade imbalances, averting a trade war.
But worries that retaliatory tariffs would harm the global economy led investors to cut equity exposure to a four-month low in March and reduce holdings of U.S. stocks to the lowest in nearly two years, according to a Reuters poll.
Advancing issues outnumbered declining ones on the NYSE by a 3.66-to-1 ratio; on Nasdaq, a 2.23-to-1 ratio favored advancers.
Volume on U.S. exchanges was 7.49 billion shares, compared to the 7.29 billion average over the last 20 trading days.
Reporting by Stephen Culp in New York; Additional reporting by Charles Mikolajczak; Editing by James Dalgleish