Wall Street rebounds as North Korea tensions wane

By Caroline Valetkevitch

(Reuters) - U.S. stocks recovered further on Monday from last week's selloff, with the S&P 500 rising about 1 percent as worries eased about a conflict between the United States and North Korea.

The S&P index was on track for its biggest single-day percentage gain since April. Technology shares including Apple were giving the index its biggest boost.

U.S. officials on Sunday played down the risk of an imminent war with North Korea. Those concerns had helped to wipe out nearly $1 trillion from global equity markets last week.

The CBOE Volatility index <.VIX>, Wall Street's fear gauge, fell more than 3 points after it spiked to a nine-month high last week. Safe-haven gold, which hit two-month highs last week, also dropped.

 

Last week, "the selling never did cascade. We had an adjustment and this week investors were able to ... say the Korean situation is something to watch, but it's probably had its effect on the market already," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

"There's still cash on the sidelines looking for an opportunity to buy the dip. And they're in there with both hands today."

The Dow Jones Industrial Average <.DJI> was up 141.68 points, or 0.65 percent, to 22,000, the S&P 500 <.SPX> had gained 24.19 points, or 0.99 percent, to 2,465.51 and the Nasdaq Composite <.IXIC> had added 81.36 points, or 1.30 percent, to 6,337.91.

Tesla rose 1.5 percent after two brokerages raised their price targets on the stock, citing the potential success of the company's Model 3 sedan.

Alibaba was up about 1.7 percent after Dan Loeb's Third Point bought 4.5 million shares in the Chinese e-commerce giant.

Advancing issues outnumbered declining ones on the NYSE by a 3.33-to-1 ratio; on Nasdaq, a 3.06-to-1 ratio favoured advancers.

The S&P 500 posted 49 new 52-week highs and 10 new lows; the Nasdaq Composite recorded 98 new highs and 85 new lows.

(Additional reporting by Sruthi Shankar in Bengaluru; Editing by Anil D'Silva and Nick Zieminski)