US equities close with slight gains as tech shares recover

NEW YORK - US stocks managed to eke out slight gains on Feb 17 after struggling in the early stages of trading, as technology shares rebounded from earlier lows and financial stocks also provided support.

After dropping as much as 1.5 per cent at its lows of the session, the S&P 500 information technology sector erased declines to close up 0.5 per cent as gains in Nvidia and Apple overcame declines in Microsoft and Oracle .

Worries about artificial intelligence disrupting business models had sparked a selloff in software firms, brokerages and trucking companies the previous week, leading to Wall Street’s three main indexes to record their biggest weekly decline since mid-November.

“There’s a lot of different trends going on in terms of where investors want to put money right now and you see that in this market where you just see spikes up and spikes down, on maybe not a daily basis, but on a regular basis,” said Mr Tim Ghriskey, senior portfolio strategist at Ingalls and Snyder in New York.

“The market is looking very short-term here and there will be a return to AI plays being very much in favour.”

Potential risks from Chinese AI players exacerbated the uncertainty. On Feb 16, Alibaba unveiled a new AI model, Qwen 3.5, designed to independently execute complex tasks.

Even with the rebound in technology names, software stocks remained under pressure, with the S&P 500 software index ending down 1.6 per cent with Intuit and Cadence Design the worst-performing in the index on the day with declines of more than 5 per cent.

The Dow Jones Industrial Average rose 32.26 points, or 0.07 per cent, to 49,533.19, the S&P 500 gained 7.05 points, or 0.1 per cent, to 6,843.22 and the Nasdaq Composite gained 31.71 points, or 0.14 per cent, to 22,578.38.

The S&P 500 financials index was among the best-performing of the 11 major S&P sectors on the day.

Gains in banks such as Goldman Sachs and JPMorgan Chase helped nudged the Dow into positive territory from a decline of 0.7 per cent earlier in the session.

Consumer staples, down 1.5 per cent, was the worst-performing S&P 500 sector on the session, dragged lower by a 7 per cent tumble in General Mills after the cereal maker cut its annual core sales and profit forecasts.

This week, the personal consumption expenditure report - the US Federal Reserve’s preferred inflation gauge - will be in focus for insights into inflation and how it could impact the central bank’s rate-cut trajectory. The data follows cooler-than-expected consumer inflation data last week that slightly raised bets on interest-rate cuts this year.

Traders are pricing in a chance of roughly 63 per cent for a rate cut of at least 25 basis points at the Fed’s June meeting, the first with odds above 50 per cent.

Chicago Fed president Austan Goolsbee said the Fed could approve “several more” interest-rate cuts this year if inflation resumes a decline to the central bank’s 2 per cent target, while governor Michael Barr said that another central bank interest rate cut could come somewhere well down the road amid ongoing risks to the US inflation outlook.

In addition, San Francisco Fed president Mary Daly said the central bank must do a deep dive into the data to determine whether AI is lifting productivity growth and in turn, economic growth, without rekindling inflation that would force tighter monetary policy.

Norwegian Cruise Line shares rallied 12.1 per cent as the best performer on the S&P 500, after activist investor Elliott said it had built a more than 10 per cent stake in the cruise operator.

Fiserv’s shares jumped 6.9 per cent after the Wall Street Journal reported that activist investor Jana Partners had taken a stake in the payments company. Masimo shot up 34.2 per cent after Danaher said it would acquire the pulse-oximeter maker for US$9.9 billion, including debt, sending Danaher shares 2.9 per cent lower.

Advancing issues outnumbered decliners by a 1.02-to-1 ratio on the NYSE while declining issues outnumbered advancers by a 1.07-to-1 ratio on the Nasdaq.

The S&P 500 posted 42 new 52-week highs and 10 new lows while the Nasdaq Composite recorded 81 new highs and 224 new lows.

Volume on US exchanges was 17.76 billion shares, compared with the 20.7 billion average for the full session over the last 20 trading days. REUTERS