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* Tech-related stocks lead gains on the Dow
* Tesla climbs after biggest one-day drop
* Tiffany drops as LVMH abandons its $16 bln takeover
* Dow up 2.3%, S&P 500 up 2.48%, Nasdaq up 2.89%
(Updates to midafternoon, changes byline)
By Chuck Mikolajczak
NEW YORK, Sept 9 (Reuters) - Wall Street's main indexes
rallied on Wednesday to stanch the bleeding after a three-day
drop as investors jumped back in to take advantage of the
repricing in technology-related stocks, a day after the Nasdaq
confirmed correction territory.
Tesla Inc TSLA.O shares jumped 7.7% after suffering their
biggest one-day percentage drop in the prior session, while
Apple Inc AAPL.O , Microsoft Corp MSFT.O and Amazon.com Inc
AMZN.O - the top three U.S. public companies by market
capitalization - each rose by at least 4%.
Other stay-at-home winners such as Facebook Inc FB.O and
Google-parent Alphabet Inc GOOGL.O also climbed, a day after
the tech-heavy Nasdaq ended 10% below its Sept. 2 record closing
high, commonly known as a correction.
"Call off the five-alarm fire, it's not here," said Peter
Kenny, founder, Kenny's Commentary LLC and Strategic Board
Solutions LLC in Denver.
"It is very important to realize those mega-cap names have
pulled the market higher and higher, so far out of range as of
last week that the market did have to come back in to some sort
of reversion to the mean."
Kenny said the Nasdaq's ability to hold its 50-day moving
average, a technical support level, was key in reversing the
market's direction.
In late afternoon trading, the Dow Jones Industrial Average
.DJI was up 631.27 points, or 2.3%, at 28,132.16, the S&P 500
.SPX gained 82.5 points, or 2.48%, to 3,414.34 and the Nasdaq
Composite .IXIC added 313.46 points, or 2.89%, to 11,161.15.
U.S. 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 Corp 9984.T
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 U.S. presidential election, with September and
October also historically turbulent months of the year.
In a reversal from the prior three sessions, growth stocks
.IGX jumped 3% to outperform the 1.7% climb in value stocks
.IVX on the day.
Market participants were watching for signs of a widening in
market breadth, supported by improving economic data.
AstraZeneca Plc AZN.L 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 U.S.-listed shares
fell 1.5%. Tiffany & Co TIF.N tumbled 6.2% after French luxury goods
giant LVMH LVMH.PA warned it was set to walk away from its
planned $16 billion takeover of the U.S. jeweler. Advancing issues outnumbered declining ones on the NYSE by a
3.24-to-1 ratio; on Nasdaq, a 2.19-to-1 ratio favored advancers.
The S&P 500 posted 2 new 52-week highs and 2 new lows; the
Nasdaq Composite recorded 30 new highs and 20 new lows.
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