(Bloomberg) – Major U.S. tech and internet stocks rallied on Tuesday after a sell-off sent some stocks into a correction and sparked a wave of bargain hunting.
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Megacap tech stocks fueled a gain in the overall market, sending the Nasdaq 100 to its best gain in over a month. Netlifx Inc. led the charge, rising 5.2% to an all-time high, while Facebook Inc. rose 2.1% following a global service outage on Monday and Senate testimony from a whistleblower. Microsoft Corp., Alphabet Inc., Apple Inc. and Amazon.com Inc. all closed with gains of at least 1%.
The rally came after Monday’s steep drop helped send the Nasdaq 100 index into oversold territory, fearing that a rise in Treasury yields could hurt the outlook for more expensive high-growth stocks.
But on Tuesday, the buyers were back.
Large-cap stocks look “very attractive” after the pull-out and still show very strong growth, said Justin Kelly, co-manager of the $ 15.2 billion MainStay Winslow Large Cap Growth Fund, which counts the Faamg names among his biggest holdings. In a telephone interview, he referred to Microsoft and Alphabet as particularly attractive names.
The group’s growth story will be the center of attention in the coming weeks, as companies release their third quarter results. Bloomberg Intelligence Says the S&P 500 Index to Post Income Growth of 14.6% in the Quarter; the five Faamg names are expected to exceed that figure, with growth ranging from Amazon’s 16.5% rate to Alphabet’s 37.5%. Reports from the five are expected before the end of the month.
Anthony Saglimbene, who helps oversee more than $ 800 billion in assets as a global market strategist at Ameriprise Financial, encourages investors to increase their positions.
“Right now, expectations point to very strong profit and revenue growth for the technology, and the group has strong profit margins. The fundamentals are very positive, ”he said in a telephone interview. “The yield issue may be a risk in the short term, but in the longer term I think you’ll want to buy technology when it’s weak.”
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