Nasdaq rebounds from sharp sell-off

The Nasdaq rebounded sharply Monday after surging government bond yields sparked a morning sell-off that briefly sent the tech-loaded index into correction territory. Bargain hunters entered the arena in the afternoon, helping the Nasdaq eke out a slight gain. Materials and industrial stocks were the biggest losers.

Senior Portfolio Manager Valerie Grant said investors are still focused on rising interest rates.

“I think that investors are really digesting the FOMC meeting from last week with an expectation of perhaps a rate increase as early as March and then several additional increases in 2022 to combine that with perhaps quantitative tightening, and that has investors a bit nervous.”

The Dow lost more than 160 points, or nearly a half percent. The S&P 500 declined a tenth percent. And the Nasdaq closed nearly flat. Nike was the Dow’s biggest decliner.

HSBC downgraded shares of the athletic apparel maker to ‘hold.”

On the S&P, that dubious honor went to Take-Two Interactive. The maker of the “Grand Theft Auto” video game franchise is buying mobile game developer Zynga for $11 billion. Zynga shares shot up more than 40%.

Shares of Lululemon fell. The yoga pants retailer warned that the spread of the Omicron variant would hurt its revenue for the holiday quarter.

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