The Nasdaq Composite Index closed at a record, after the biggest drop for U.S. stocks in three weeks, as technology shares rebounded and investors watched for progress in talks on Greece.
Semiconductors rallied, while Apple Inc. gained 1.9 percent after dropping more than 2 percent Tuesday. Microsoft Corp. climbed 2.2 percent. Tiffany & Co. jumped 11 percent after its profits beat estimates. Airlines snapped a five-day losing streak. Hormel Foods Corp. advanced after agreeing to buy closely held Applegate Farms LLC. Michael Kors Holdings Ltd. tumbled 24 percent after its earnings forecast missed projections.
The Nasdaq rose 1.5 percent to 5,106.59. at 4 p.m. in New York amid its best gain since January. The Standard & Poor’s 500 Index added 0.9 percent to 2,123.48, nearly reversing a 1 percent selloff on Tuesday and closing 0.3 percent from its record. The Dow Jones Industrial Average advanced 121.45 points, or 0.7 percent, to 18,162.99.
“You’ve got a couple company specific moves, but the big picture is just kind of a combination of this Greece headline bouncing off of yesterday’s move,” said Michael Antonelli, an institutional equity sales trader and managing director at Robert W. Baird & Co. “As tiresome as it is, it’s Greece and the Fed. Those are the two things the market is concerned about right now.”
Nine of the S&P 500’s 10 main groups rose, led by tech shares as the group’s 1.8 percent rally erased Tuesday’s 1.4 percent retreat. Apple’s rebound boosted the advance.
Chipmakers in the benchmark index jumped the most in two months. Gains came late in the session as Broadcom Corp. soared 22 percent to its highest level in 14 years after the wireless chipmaker was said to be near a deal to be bought by Avago Technologies Ltd. Intel Corp. climbed 1.8 percent, while Nvidia Corp. and Micron Technology Inc. rose at least 2.9 percent.
Stocks were lifted earlier after a Greek government official with knowledge of the matter said Greece and its creditors have started crafting a staff level accord to solve its debt crisis. He added that disagreement between creditor institutions remains a problem.
European Commission Vice President Valdis Dombrovskis, who is in charge of euro matters, later denied a Greek government statement that a deal is close with international creditors.
The S&P 500 fell yesterday as better-than-forecast data and comments by Federal Reserve officials bolstered the case for a rate increase. The Chicago Board Options Exchange Volatility Index jumped 16 percent, only the second move all year to exceed 15 percent. By comparison, the VIX surpassed that four times in December.
“There is kind of a continual theme here of the market struggling to be able to sustain anything either up or down,” said Jim Paulsen, the Minneapolis-based chief investment strategist at Wells Capital Management Inc., which oversees $347 billion. “It’s been a very narrow range here. It has broken out to marginal new highs along the way, but it hasn’t really been able to sustain an advance.”
Fed policy makers preparing to raise rates that they’ve held near zero since December 2008 are working to engineer a smooth tightening and avoid the volatility spurred by the so-called “taper tantrum” that roiled global markets, and sent the VIX soaring more than 50 percent in the late spring of 2013.
Fed Vice Chairman Stanley Fischer said Tuesday that policy makers will consider global growth as they begin to raise interest rates, and that they could increase borrowing costs more gradually should the world economy falter.
Investors will watch reports on housing and consumer sentiment later this week for further clues on the timing of the rate increase. An estimate on Friday may also show the U.S. economy contracted in the first quarter, compared with a prior reading showing growth. Economists expect the Fed to raise borrowing costs in September, according to a Bloomberg survey.
The VIX fell 5.6 percent to 13.27 after its Tuesday jump, which was the biggest since January. About 5.9 billion shares changed hands on U.S. exchanges Wednesday, 7.5 percent below the three-month average.
Health-care and financial companies in the benchmark index climbed at least 0.9 percent. The Nasdaq Biotechnology Index jumped 1.7 percent, paced by a rise of at least 2.4 percent in Gilead Sciences Inc. and Biogen Inc. Vertex Pharmaceuticals Inc. added 4.2 percent.
Banks rose for the first time in five sessions. Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co. all increased at least 1 percent. Morgan Stanley climbed 2.2 percent, the most in more than two months. General Electric Co. hired the firm to advise on the sale of its Japan leasing business, which has 500 billion yen ($4 billion) of assets, said people with knowledge of the situation.
A Bloomberg index of U.S. airlines gained 2.3 percent, after the longest losing streak in six weeks sent the gauge down more than 13 percent. Hawaiian Airlines parent Hawaiian Holdings Inc. advanced 8.8 percent, and United Continental Holdings Inc. climbed 3.4 percent.
Hormel led consumer staples companies higher after agreeing to buy closely held Applegate Farms for about $775 million in an effort to gain more credibility in natural foods. The Spam maker rose 3.2 percent, its highest close in almost three months.
Energy companies in the S&P 500 slipped along with oil prices. Exxon Mobil Corp. and Chevron Corp. were two of the Dow’s four losing stocks today, while Apache Corp. and Noble Energy Inc. declined more than 1 percent.
Consumer durables and apparel companies in the benchmark dropped 1.5 percent. Michael Kors Holdings Inc. lost 24 percent, the most ever, to lead the retreat after a surprise decline in North American sales and a dim forecast for the coming year. Coach Inc. and Fossil Group Inc. lost more than 3.2 percent.