“On one level it looks speculative but on another it is almost defensive because we know these companies will survive no matter what COVID throws at us.”
Analysts also said the Nasdaq’s ability to hold its 50-day moving average, a technical support level, was key in reversing the market’s direction.
The Dow Jones Industrial Average rose 1.6 per cent, the S&P 500 gained 2 per cent and the Nasdaq Composite added 293.87 points, or 2.7 per cent. It sets up the ASX for a strong start, with futures at 6.05am AEST pointing to a gain of 77 points, or 1.3 per cent, at the open. On Wednesday, the ASX shed 2.2 per cent.
US stocks have become susceptible to volatility as market leadership has narrowed during the year to a handful of heavyweight tech-related stocks as traders bid up their shares in a rally that triggered a Nasdaq-led rebound for Wall Street from its pandemic lows in March.
The recent pullback has also been driven by worries that sellers of call options would unwind massive amounts of stocks they bought as hedges during the rally.
Media reports last week said SoftBank Group has made big bets on equity derivatives tied to tech firms.
In a sign of growing unease about the positioning in tech stocks, skew, a measure of demand for protective put options in relation to call options, has risen sharply.
Market volatility is expected to further increase in the run-up to the US presidential election, with September and October also historically turbulent months of the year.
In a reversal from the prior three sessions, growth stocks jumped to outperform the climb in value stocks on the day.
Market participants were watching for signs of a widening in market breadth, supported by improving economic data.
AstraZeneca could resume trials for its experimental coronavirus vaccine next week, the Financial Times reported, after the British drugmaker paused global trials of its experimental COVID-19 vaccine. Still, its US-listed shares fell.
Tiffany & Co tumbled after French luxury goods giant LVMH warned it was set to walk away from its planned $US16 billion ($22 billion) takeover of the US jeweller.
A Global Asset Management Seoul Korea Magazine