Stocks rebound after two days of steep losses

Stocks rose on Wednesday after two days of broad losses by big technology companies, which dragged U.S. indexes into the red for the year.

The Dow climbed 122 points, or 0.5 percent, to 24,587 in early trade. The S&P 500 and Nasdaq also gained. A sharp drop on Tuesday erased 2018 gains for all three indexes.

Shares of big tech companies like Apple and Facebook have lost ground of late amid worries over slowing economic growth, trade tensions and federal regulation. Retailers also declined on weaker-than-expected financial results, while energy stocks slid along with the price of oil. 

Investors are pondering whether the downturn represented a short-term blip, or the end of the record-long bull market. 

“In the last day of trading before the U.S. closes down for Thanksgiving holidays, risk aversion has eased and stocks are trading higher,” said Fiona Cincotta, “However, concerns over the U.S.-China trade relations continue to linger and oil prices, though higher after the London market opened, remain relatively low.”

Investors eye Trump-Xi meeting

U.S. President Donald Trump and his Chinese counterpart Xi Jinping are scheduled to meet at Group of 20 summit later this month, but it is unclear if the talks will spur a reduction in tensions. New national security regulations proposed by the Trump administration, which could limit exports of high-tech products in fields like quantum computing, machine learning and artificial intelligence have weighed heavily on the technology sector.

A 21-nation summit in Papua New Guinea, which ended without a final communique, has put the trade dispute between the U.S. and China in the spotlight. Draft versions of the communique showed that the U.S. wanted strong language against what it says are unfair Chinese trade practices, while China wanted clear opposition to protectionism and unilateralism. 

Oil prices rebounded Wednesday after plunging on worries of rising supplies and softening global growth. Benchmark U.S. crude added $1.06 to $54.49. The contract dropped $3.77 to close at $53.43 in New York, its lowest price in more than a year. Brent crude, the international standard, gained 81 cents to $63.34. It fell $4.26 to $62.53 in London.

President Donald Trump on Wednesday cheered the fall in oil prices, saying in a tweet that it amounts to “a big Tax Cut for America and the World.” Yet economists express concern the decline could curb investment in the U.S. shale-energy sector, offsetting the benefit to consumers of lower oil prices.

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