Stocks fell in the early going Wednesday on a raft of dismal economic reports, but technology stocks led a strong rebound ahead of the start of what is expected to be a tough holiday shopping season.
At the midpoint of the trading session, the Dow was up 75 points to 8554, the S&P gained 9 to 866, while the Nasdaq surged 37 to 1501. Volume was on the light side in pre-holiday trade, while breadth was positive by more than two to one.
Consumer spending, new home sales, weekly jobless claims and manufacturing data all pointed to continued weakness in the economy, but buying in the tech sector sparked an early rebound. Dell (NASDAQ: DELL), Research In Motion (NASDAQ: RIMM) and Applied Materials (NASDAQ: AMAT) led the way, with gains of more than 5% each. Dell has rallied about 20% since initially dropping on its earnings report last week.
AMD (NYSE: AMD) led a strong chip sector with a 15% gain.
But Amazon (NASDAQ: AMZN) and Blue Nile (NASDAQ: NILE) lagged after comScore said online holiday spending could be flat this year, well below last year’s 19% sales gain. Still, Overstock.com (NASDAQ: OSTK) jumped 15%.
BCE (NYSE: BCE) plunged 35% on news that the Bell Canada parent company’s leveraged buyout could be in trouble because of debt and market conditions.
On the economic front, President-elect Barack Obama named former Fed chairman Paul Volcker to head a new economic advisory committee.
Note: The Market Close will return Dec. 1.
