S&P 500 turns positive with help from tech in volatile session

By Sinead Carew

(Reuters) - The S&P 500 turned positive on Monday afternoon with help from technology stocks in a volatile session as investors remained worried about global growth, the U.S.-China trade war and uncertainty over Britain's exit from the European Union.

The energy index was the S&P's biggest percentage loser followed by financials, which have been dogged by worries about cooling global growth, interest rates and trade tensions between the United States and China.

But an afternoon comeback in Apple Inc shares appeared to cheer up investors in the broader technology sector though investors were wary of continued volatility.

"Tech has been the leading edge on the trade lower. Any stability there is going to really help the overall market - massively," said Peter Kenny, founder, Kenny's Commentary LLC and Strategic Board Solutions LLC in New York.

 

"There is clearly very, very, very broad pressure on the market. It isn't just the fact the large cap techs have underperformed the broader market. It's the financials, they have underperformed the broader market massively," he said.

At 2:51 PM ET, the Dow Jones Industrial Average <.DJI> was up 9.73 points, or 0.04 percent, at 24,398.68, the S&P 500 <.SPX> gained 3.66 points, or 0.14 percent, to 2,636.74 and the Nasdaq Composite <.IXIC> added 54.73 points, or 0.79 percent, to 7,023.98.

After a sea of red in the morning, seven of the 11 major S&P sectors were positive by late afternoon. The technology sector <.SPLRCT> led the gainers with a 1.4 percent gain followed with a 0.7 percent increase in the communications sector <.SPLRCL>

Energy stocks <.SPNY> retreated 1.99 percent, the most among the 11 S&P sectors as oil prices fell. [O/R]

The next biggest percentage decline was a 1.4 percent drop in financials <.SPSY> as investors worried about global growth and rising rates.

Brexit turmoil may have hurt bigger banks with international operations after British Prime Minister Theresa May said she was delaying a planned vote in parliament on her Brexit deal as it was set to be rejected "by a significant margin".

The rate-sensitive bank subsector <.SPXBK> tumbled 2.1 percent as investors pointed to ongoing worries about global growth.

"What's going on today is more concerns about growth going into next year but there's no trigger for why banks would be down more than the rest," said Michael Cronin, equity research analyst at Aberdeen Standard Investments.

"The valuations are attractive but there needs to be some greater confidence the growth outlook is going to be a little better than the market's expecting to make the group interesting."

Apple Inc was trading up 0.6 percent at $169.54 after hitting a low of $163.33 earlier in the day after Qualcomm Inc said it had won a preliminary order from a Chinese court banning the import and sale of several iPhone models in China due to patent violations.

The small-cap Russell 2000 <.RUT> also pulled back from its session low and was last down 0.1 percent and was 16.9 percent below its record closing high on Aug. 31.

Still, declining issues outnumbered advancing ones on the NYSE by a 2.37-to-1 ratio; on Nasdaq, a 1.45-to-1 ratio favoured decliners.

The S&P 500 posted 3 new 52-week highs and 90 new lows; the Nasdaq Composite recorded 7 new highs and 358 new lows.

(Additional reporting by Chuck Mikolajczak in New York, Medha Singh in Bengaluru, additional reporting by Amy Caren Daniel; Editing by Anil D'Silva, Sriraj Kalluvila and Susan Thomas)