S&P 500 reverses higher on session as tech stocks gain, Nvidia jumps 7%

S&P 500 reverses higher on session as tech stocks gain, Nvidia jumps 7%

A trader works on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., August 10, 2021.

Andrew Kelly | Reuters

The S&P 500 rebounded Thursday as investors shook off concerns about the Fed removing stimulus and bought technology stocks higher.

The S&P 500 traded gained 0.3%. The Nasdaq Composite inched 0.4% higher. The Dow Jones Industrial Average added 5 points

Nvidia’s stock jumped more than 7% midday after the chip giant’s quarterly earnings and revenue beat Wall Street estimates amid strong graphics cards sales.

Shares of tech stocks including Microsoft and Netflix traded in the green.

Defensive stocks like consumer staples and health care names gained, helping lift the averages. Procter & Gamble and Merck each gained about 1%.

Meanwhile, stocks closely linked to the economy led losses. Steelmaker Nucor lost about 3%. Oil companies Devon Energy and Occidental Petroleum shed more than 5% each. Miner Freeport-McMoRan fell about 6%. General Motors fell more than 3%. Reopening plays like airlines and hotels were also lower.

WTI crude oil dropped more than 3%, falling to around $63, and copper lost more than 2% on concern about global growth without the Fed bond-buying support. The 10-year Treasury yield fell 3 basis points to 1.243%. (1 basis point equals 0.01%.)

Investors digested mixed economic data released Thursday. First-time jobless claims last week hit a new pandemic-era low at 348,000, declining more than expected from the week prior.

The Philadelphia Fed Index, a gauge of growth in the region, still indicated expansion but at a level worse than expected. The August reading was 19.4, below the 22 consensus of economists polled by Dow Jones.

Robinhood shares tumbled 7% after its first earnings report as a public company. The app warned investors that its third-quarter results could be affected by a slowdown in trading.

“For the three months ended September 30, 2021, we expect seasonal headwinds and lower trading activity across the industry to result in lower revenues and considerably fewer new funded accounts than in the prior quarter,” the company said in the earnings release.

For the week, the three major indexes are down more than 1%.

The S&P 500 and the Dow saw a second-straight day of losses Wednesday, with the Dow shedding more than 380 points for its worst performance in over a month. Meeting minutes from the Fed’s gathering in July showed the central bank has started eyeing tapering its $120 billion in monthly bond purchases before the year-end.

“The recent bout of market angst seems to be a combination of investor vertigo, looking for an excuse to take profits, and the bumpy path of reopening the economy, with new Covid variants on the rise,” Art Hogan, chief market strategist at National Securities, said in a note.

Goldman Sachs cut its economic growth forecast for the current quarter to 5.5% from 9% Wednesday night, adding to the negative sentiment. The firm also sees higher inflation than expected for the rest of the year.

“The impact of the Delta variant on growth and inflation is proving to be somewhat larger than we expected,” wrote Jan Hatzius, chief economist at Goldman Sachs, in the note.

—CNBC’s Michael Bloom contributed reporting.

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