NEW YORK |
NEW YORK (Reuters) – Stocks rose more than 1 percent on Monday, with the SP 500 snapping a six-day losing streak in a rebound from equities’ biggest weekly drop in almost six months, but Facebook slumped in its second session after a disappointing debut.
Tech shares .GSPT were among the day’s biggest gainers, with an SP sector index surging 2.8 percent on the strength of Apple Inc (AAPL.O). Shares of Apple climbed 5.8 percent to $561.28, leading the Nasdaq to its biggest one-day percentage gain since December 2011.
Facebook Inc (FB.O), the social networking giant that fell short of lofty expectations last week, fared no better on Monday. Facebook’s stock sank 11 percent in its second day of trading, dropping to $34.03, well below its $38 issue price.
“Institutional buyers weren’t as enamored with Facebook as retail investors were, so it isn’t a surprise to see them taking their liquidity out for other areas,” said John Norris, managing director of wealth management with Oakworth Capital Bank in Birmingham, Alabama.
Investors are watching the 1,300 to 1,290 range on the SP 500 as a major support level, the lower end of which was tested last week after the benchmark index had fallen 7.8 percent since the end of April. The bottom of the range coincides with the SP 500’s 10-month moving average.
Sentiment improved after G8 leaders gave verbal backing for Greece to stay in the euro and stressed over the weekend that their “imperative is to promote growth and jobs.” Greece is expected to hold elections after the country was unable to form a government following its most recent elections.
The Dow Jones industrial average .DJI jumped 135.10 points, or 1.09 percent, to 12,504.48 at the close. The Standard Poor’s 500 Index .SPX climbed 20.77 points, or 1.60 percent, to 1,315.99. The Nasdaq Composite Index .IXIC rose 68.42 points, or 2.46 percent, to close at 2,847.21.
In another factor helping sentiment, China’s premier called for additional efforts to support growth on Sunday, signaling Beijing’s willingness to take action after a recent series of economic indicators suggested that the world’s second-biggest economy will slow further in the second quarter.
“We’ve been in something of a near panic lately, and after so many down days, it was inevitable that we would bounce back, especially with news indicating that things aren’t falling apart,” Norris said.
Facebook shares were expected to face tough trading this week if lead underwriter Morgan Stanley stops supporting the stock and managers listed lower down in the IPO book, who were hoping for an early surge, decide to get out before going underwater.
Nasdaq OMX Group (NDAQ.O) said it plans to implement procedures through which the Financial Industry Regulatory Authority (FINRA) will accommodate orders not executed in Facebook during the social media company’s market debut on Friday. Nasdaq shares gained 3.6 percent to $22.78 after falling more than 4 percent on Friday.
In earnings news, Lowe’s Cos Inc (LOW.N), the world’s second-largest home improvement chain, cut its fiscal-year earnings outlook and said demand slowed toward the end of the traditionally strong first quarter. Lowe’s stock slumped 10.1 percent to $25.60.
Yahoo (YHOO.O) shares rose 1 percent to $15.58 after news that Chinese Internet entrepreneur Jack Ma is buying back up to half of a 40 percent stake in his Alibaba Group from Yahoo for $7.1 billion in a deal that moves the Chinese e-commerce leader closer to a public listing.
About 83 percent of companies traded on the New York Stock Exchange closed in positive territory while on the Nasdaq, almost three-fourths of shares ended higher.
Volume was light, with about 6.77 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year’s daily average of 7.84 billion.
(Editing by Jan Paschal)