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Dow closes more than 350 points higher as tech cuts Monday's losses

  • Netflix shares rose 1.2 percent while Amazon gained 1.5 percent in volatile trading, while Facebook advanced 0.5 percent.
  • "So far, this is a reaction to an oversold condition," said Bruce Bittles, chief investment strategist at Baird.
  • The moves Tuesday come after Wall Street tumbled in the previous session, with the Dow dropping more than 450 points.

U.S. stocks rose on Tuesday as technology shares cut sharp losses from the previous session.

The Dow Jones industrial average closed 389.17 points higher at 24,033.36 with Nike as the best-performing stock in the index. The S&P 500 gained 1.3 percent to close at 2,614.45, with tech rising 1 percent and energy leading. The Nasdaq composite advanced 1 percent to 6,941.28.

"So far, this is a reaction to an oversold condition," said Bruce Bittles, chief investment strategist at Baird. "What we're looking for now is an upside volume explosion" of nine stocks rising for every declining stock to confirm a new upward trend is starting out. "Unless we get that, all rallies are suspect."

Netflix shares rose 1.2 percent while Amazon gained 1.5 percent in volatile trading, while Facebook advanced 0.5 percent.

The major averages briefly hit session lows as tech stocks hit their lows of the day. Amazon traded lower momentarily after President Donald Trump bashed the company again on Twitter.

"Our 'Tweeter-in-Chief' attacked Amazon again and that took the FANG stocks lower," said Dave Lutz, head of ETF trading at JonesTrading about the slip earlier in the session.

Amazon surged to session highs late in the session after Bloomberg reported, citing sources, that the White House had no plans to take action against the company. The major averages also hit their highs of the day after the news.

A trader works on the floor of the New York Stock Exchange.
Michael Nagle | Bloomberg | Getty Images
A trader works on the floor of the New York Stock Exchange.

The moves Tuesday come after Wall Street tumbled on the first trading day of April and the second quarter. On Monday, the Dow sank more than 450 points, with the 30-stock index hitting a new low for the year. The S&P 500 and Nasdaq closed correction territory amid the possibility of a trade war, and fears surrounding the tech industry.

Over the weekend Trump tweeted that e-commerce giant Amazon was scamming the U.S. Postal Service, and that the service was losing "billions of dollars" because it delivered packages.

On Monday, shares of Amazon sank more than 5 percent, while other technology stocks such as Facebook, Alphabet and Netflix, also posted sharp declines. In March, shares of Facebook came under severe pressure following concerns on how the social media giant handles the data of people who use the platform.

Tech has been the best-performing sector in the S&P 500 sector over the past 12 months, rising 23 percent through Monday's close. But the sector has been under pressure recently because of growing concerns the space could be hit with regulation.

Investors "have been reassessing their stance on the sector," said Andrea Cicione, head of macro strategy at TS Lombard. "There are ever louder calls for tighter regulation, which would likely affect the advertising revenues of the social network company and other internet giants such as Google."

Concerns surrounding global trade also continued to rumble on. China recently announced that it would be implementing new tariffs on 128 U.S. products, including fruit and meat, in response to the U.S.' own set of levies on steel and aluminum.