US stocks rose on Monday, led by technology shares, as investors shrugged off signs of a weak economy to wade into stocks that have become cheap. The Nasdaq Composite index gained 0.8 percent and the Dow and S&P 500 rose slightly as Wall Street stanched the bleeding after four days of losses. Technical measures indicated stocks had fallen too far.
Cisco Systems Inc, the maker of Internet network equipment, was the most heavily traded Nasdaq stock, gaining 2.9 percent to $21.98, Last week it fell on a disappointing revenue forecast. "If you look back to last week, the Cisco report and the negative reaction brought techs down," said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.
"Maybe what we are seeing is some recovery there." The Dow Jones industrial average gained 24.29 points, or 0.24 percent, to 10,327.44. The Standard & Poor's 500 Index added 2.89 points, or 0.27 percent, to 1,082.14. The Nasdaq Composite Index rose 18.36 points, or 0.84 percent, to 2,191.84.
The PHLX semiconductor index advanced 1 percent, while its relative strength index hit its lowest point since November 2008 on Friday. The RSI, which determines whether stocks are oversold or overbought, fell to 31.4, right above the oversold indicator at 30, indicating a security or index was relatively cheap. The index also traded below its lower Bollinger band on Friday, pointing again to an oversold condition. The Bollinger is a technical measure used by traders to show the highs or lows of a price, relative to previous trades.
Among leaders on the PHLX, Intel Corp climbed 1.9 percent to $19.51 and SanDisk Corp added 3 percent to $42.78. The market was on track to rebound from its worst performance in six weeks despite data on housing and regional manufacturing on Monday that signalled weakness in the recovery.
Lowe's Cos Inc edged up 2.3 percent to $20.03 after the home improvement chain said it expects same-store sales to rise about 2 percent for the fiscal year. Some analysts saw the forecast as a good sign, given persistently soft US consumer sentiment. Strayer shares plummeted 12.5 percent to $175.05 and Capella shares slumped 11.6 percent to $62.09. A gauge of manufacturing in New York state was up in August, the New York Fed said, but the gauge came in below forecasts and the new orders component index fell below zero for the first time since June 2009, an early sign of a slowdown.
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