Technology sector soars as Yahoo climbs 10%

Dow Jones:10,939.95 (+131.24) Nasdaq:2,460.51 (+55.69) S&P 500:1,144.04 (+20.09)

US STOCKS rallied for a second day yesterday, as investors bid up materials and energy shares on rising commodity prices and poured into beaten-down technology names after days of selling.

Stocks continued to recover from a decline that briefly took the S&P 500 into bear-market territory.

The Nasdaq 100 technology sector index jumped 3.7 per cent; it has gained 7.3 per cent in the past two sessions.

“A lot of people are looking at tech stocks as a good growth sector,” said Peter Costa, president of Empire Executions in New York.

Traders cited the relative strength in the S&P 500 after breaking the closely watched 1,100 level on Tuesday as a catalyst for short sellers to pocket gains and as a damper on overall selling pressure.

Economic data showed growth in the US service sector was steady in September and private hiring picked up, suggesting the economy was not yet slipping into recession.

A jump in the price of commodities, including crude oil and copper, lifted shares in the materials and energy sectors.

The Dow Jones industrial average gained 131.24 points, or 1.21 per cent, to 10,939.95 at the close.

The S&P 500 added 20.09 points, or 1.79 per cent, to 1,144.04.

The Nasdaq Composite rose 55.69 points, or 2.32 per cent, to 2,460.51.

European finance ministers agreed to safeguard banks, many of which could face heavy losses if a planned second bailout package for Greece does not go ahead, after France and Belgium agreed to bail out the debt crisis’ first banking casualty, Dexia.

Among the biggest gainers in technology were shares of Yahoo, up 10.1 per cent at $15.92 after a Reuters report that Microsoft may be preparing a bid for the search engine company.

Research in Motion was up 12.4 per cent at $23.60.

The US economy’s services sector expanded in September, slightly faster than forecast by a Reuters poll, while the private sector added 91,000 jobs in September, increasing optimism about tomorrow’s non-farm payrolls report from the Labor Department. – (Reuters)