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Overnight Markets: US stocks rebound despite continuing tech sell-off

Overnight Markets: US stocks rebound despite continuing tech sell-off

US stocks closed higher on Tuesday after higher oil prices led to strong gains in the energy sector despite lingering worries about trade and a Facebook data scandal that hit social media shares.

The Dow Jones Industrial Average added 127 points, or 0.52%, to 24,738, the S&P 500 gained four points, or 0.14%, to 2,717 and the Nasdaq Composite rose 16 points, or 0.21%, to 7,360.

Oil prices surged more than 2% to touch a three-week high, triggered by tensions in the Middle East and the possibility of further declines in Venezuelan crude output. This propelled the S&P energy index up 0.95%, making it easily the best performing of the 11 major S&P 500 sectors.

Facebook shares fell 4.2% after the social media company said on Tuesday it faced questions from the US Federal Trade Commission about how its users’ personal data was mined by a political consultancy hired by President Donald Trump’s campaign. The stock has plunged nearly 12% over the past two days.

Shares of Snap Inc fell 3.56%, while Twitter Inc shares tumbled 9.47%. The Global X Social Media ETF lost 1.2%.

“I don’t think the selling is over yet in Facebook but it is a characteristic of the weak market overall,” said Mohannad Aama, Managing Director, Beam Capital Management LLC in New York.

Elsewhere, Oracle fell 8.7% after the business software maker reported lower-than-expected quarterly revenue.

Financial stocks gained 0.27% as investors awaited a near-certain interest rate increase at the end of the Federal Reserve’s two-day meeting on Wednesday.

Shares of defense companies gained amid reports Trump plans to boost the exports of lethal drones to more US allies. Kratos Defense rose 3.7% and Boeing Co gained 1.9%.

In Asia, share markets gained on Wednesday in morning session, with markets focused on the US Fed after it kicked off its March meeting.

Seoul's benchmark Kospi index traded higher by 0.17%. Over in Sydney, the S&P/ASX 200 edged up 0.23%. In Greater China, the Hang Seng Index added 1.24%, while on the mainland, the Shanghai Composite Index rose 0.70%.

Markets in Japan will be closed on Wednesday for the vernal equinox.

 

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