US technology stocks jumped in early morning trading today as investors, betting that soft retail sales in February will boost the odds the US Federal Reserve will cut interest rates, ventured back into the market in search of beaten shares.
But blue chips wavered near unchanged as tension gripped Wall Street. Yesterday, concerns over corporate growth and the weak economy pushed the tech-rich Nasdaq below the key 2,000 mark. The blue-chip Dow notched its fifth-worst point drop ever, while the broad Standard & Poor's 500 hurtled into bear territory with its sixth-largest point drop.
"The big problem with the market is that you are not going to get any commitment of longer-term capital, because most of that money gets allocated based on earnings or balance sheets and all we are hearing are horror stories on the earnings front," said Mr Paul Cherney, a market analyst at S&P Marketscope.
The technology-rich Nasdaq Composite Index climbed 48.00 points, or 2.5 per cent, to 1,971.38. The blue-chip Dow Jones industrial average was off 8.91 points, or 0.09 per cent, at 10,199.34. The broader Standard & Poor's 500 Index gained 3.35 points, or 0.28 percent, at 1,183.51.
US retail sales fell in February for the first time since November 2000 in a sign that waning consumer confidence is stalling spending, the US government reported.
But the drop in retail sales rekindled expectations that the Fed will cut interest rates by 50-basis points at its next policy-setting meeting on March 20th.