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Tech Sector Helps Lift U.S. Stock ETFs; QQQ Up 2%

This article was originally published on ETFTrends.com.

U.S. stocks and related ETFs ended their losing streak Monday with technology shares leading the rebound.

On Monday, the Invesco QQQ Trust (QQQ) was up 2.0%, SPDR Dow Jones Industrial Average ETF (DIA) gained 0.6% and  SPDR S&P 500 ETF (SPY) rose 1.4%.

Technology shares rallied Monday after Nvidia Corp (NVDA) agreed to acquire computer-networking supplier Mellanox Technologies Ltd. (MLNX) in an all-cash deal valued at about $7 billion, the Wall Street Journal reports.

NVDA shares were up 7.3% and MLNX was 8.3% higher after the announcement.

High-flying, growth stocks like technology companies were among the worst hit over the past year on the quick shift in risk-off sentiment and concerns over the health of the now decade-long bull equity market. Nevertheless, tech stocks have made a swift rebound this year, with the Technology Select Sector SPDR ETF (XLK) , the largest technology-related ETF, up 12.6% year-to-date.

“There may have been too much of a run up from a valuation perspective in technology stocks, but they’re still a growth engine,” Ron Weiner, managing partner and director at RDM Financial Group at HighTower, told the WSJ. “They probably sold off a little too much recently, but long term as an industry they’re well positioned because technology is the future.”

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Broad market gains

Monday's broad market gains also came off the heels over rising skepticism over the health of the global economy, which prompted a swift decline on Friday. Furthermore, a drop in Chinese exports and an unexpectedly weak U.S. jobs also led Wall Street to its worst week since the end of 2018. While some concerns linger, Geoffrey Yu, head of the investment office at UBS Wealth Management, argued that some were beginning to see a possible turn around, especially for the prolonged trade talks between the U.S. and China.

“It seems like the market is starting to move on from this, pricing in significant good news,” Yu told the WSJ.

Strong consumer spending numbers also helped shift the mood, bringing a sense of solid economic growth in the first quarter after a mixed jobs report Friday.

“The retail numbers were relatively good, signaling the consumer is alive and well,” John Carey, managing director and portfolio manager at Amundi Pioneer, told the WSJ. “People are hopeful that the economic recovery is going to continue and we’re not going into a recession.”

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