Dow rises 100 points as tech shares bounce, Apple up 1%

Stocks rose slightly on Thursday as tech tried to recover some of its steep losses of the month. The Dow

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Stocks rose slightly on Thursday as tech tried to recover some of its steep losses of the month. 

The Dow Jones Industrial Average traded 104 points higher, or 0.4%, and erased a 226-point drop. The S&P 500 climbed 0.5% and the Nasdaq Composite rose 0.8%.

Shares of Apple gained 1.7%; Microsoft and Alphabet each advanced more than 1% as well. Facebook climbed 0.9% and Amazon traded 2.2% higher. 

Stocks also got a boost after the release of strong new home sales data. The major averages were under pressure earlier in the session after disappointing unemployment data raised concern about the state of the economy. 

First-time claims for state unemployment benefits totaled 870,000 for the week ending Sept. 19, higher than a Dow Jones estimate of 850,000. Continuing claims — which include those who received unemployment benefits for at least two straights — declined slightly but were still higher than forecast. 

The sluggish labor-market data rattled investors as the U.S. government could see a fiscal cliff by the end of the month. 

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"Claims, arguable the most important high frequency data point currently, missed expectations and moved up week-over-week," Evercore ISI strategist Dennis DeBusschere, said in a note Thursday. "With the Fed diminishing its own credibility by continually emphasizing the ineffectiveness of monetary policy and begging for fiscal support, weaker data will have a big impact on risk assets. Especially if the fiscal cliff starts to bite, which some indicators suggests might be starting."

Wall Street is also grappling with a lack of new fiscal stimulus, which several economists and the Federal Reserve argue is needed for the economic recovery to continue. 

This lack of a stimulus bill led Goldman Sachs to slash its fourth-quarter GDP forecast to 3% from 6% on an annualized basis. 

"We think it is now clear that Congress will not attach additional fiscal stimulus to the continuing resolution," Jan Hatzius, chief economist at Goldman Sachs, wrote in a note. "This implies that after a final round of extra unemployment benefits that is currently being disbursed, any further fiscal support will likely have to wait until 2021."

Comments from President Donald Trump that he would not commit to a peaceful transfer of power should he lose the election appeared to hit sentiment, raising concern about a drawn-out election result.

Tough September continues

Traders have had a tough month in September, with the major market benchmarks falling sharply as tech shares lose steam. 

So far in September the S&P 500 has declined 7.5%, while the Dow has shed 5.8%. The Nasdaq Composite has been the relative outperformer, registering a loss of 9.7% as investors rotate out of Big Tech. Facebook, Amazon, Apple, Netflix, Alphabet and Microsoft are all down at least 11% in September.

"Psychology around [tech] shifted and it's no longer the stalwart source of support it once was. Meanwhile, investors still aren't comfortable enough with the cyclical/value stocks to even begin to offset the ongoing tech weakness," wrote Adam Crisafulli of Vital Knowledge.

— CNBC's Yun Li contributed reporting

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