US stocks ended higher rebounding from selloff on the back of a rally by technology stocks with the Nasdaq recording a fresh record close.
Also aiding the rally were reports that Greece would avoid a default after officials privy to the negotiations between Greece and its creditors intimated that the two parties were close to a deal.
US stocks had sold off on Tuesday- their worst session in more than three weeks- after the dollar strengthened against other currencies on bullish US economic data.
A robust dollar is bearish for stocks as it means hat companies with overseas operations earn less when their earnings are brought back to the country.
Technology shares, worst hit by Tuesday’s selloff, pulled ahead on Wednesday on news by the Wall Street Journal that US semiconductor giant Broadcom was in advanced talks to be acquired by Avago Technologies ltd.
“What we are seeing today is a traditional bounce back,” Michael Wall, president and founder of Retire Well and WALL Financial Group, told Reuters.
“I expect the sideways trend to continue though the market will continue to grind for gains in the coming few months.”
The Dow Jones Industrial Average jumped by 121 points or 0.7% in late afternoon trading to 18,162.99 points to rebound from its 1% decline in the previous session.
The S&P 500 Index ended 19.18 or 0.9% higher at 2,123.48, a few points within its closing record. All ten of the benchmark index’s key sectors were positive for the day led by technology and health.
The technology heavy Nasdaq Composite advanced by 73.34 points or 1.5% at 5106.59 points- its new all time closing high bolstered by a 1.9% rally in its most important component Apple Inc.
“Certainly, there is a bit more volatility, but that is expected as the Federal Reserve is in the process of taking off the training wheels, and moving away from zero-rate policy,” Martin Leclerc, chief investment officer and portfolio manager at Barrack Yard Advisor, told Market Watch
“While the aggregate market is expensive, there are individual stocks that offer attractive dividend yields at much lower valuations than the S&P 500.”
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