Tech stocks are pushing the S&P 500 to record highs, buoy Nasdaq
© Reuters. FILE PHOTO: A US flag is seen on the New York Stock Exchange in the Manhattan neighborhood of New York City
By David French
(Reuters) – The index closed at another record high Tuesday, and the index jumped as investors shook off concerns over Johnson & Johnson (NYSE 🙂 ‘s halt to COVID-19 vaccine launches and strong US inflation.
The drugmaker’s stocks hit a month low before recouping some losses to close 1.3% as calls to halt use of the COVID-19 vaccine after six women developed rare blood clots set another setback for the efforts to fight the pandemic represented.
The news came when US data showed that the index of consumer prices (CPI) rose the most in more than 8 1/2 years in March, which the majority of economists expect for a short period of higher inflation.
US futures initially fell on the J&J news but reduced losses according to the CPI data. Solid demand for US Treasury bond issuance on Tuesday continued to drag yields lower, underscoring investors’ lack of concern about an impending rate hike.
Instead, in one of the quietest meetings of the year, soaring tech names that flourished during last year’s coronavirus lockdown attracted renewed purchases, causing Apple Inc (NASDAQ :), Microsoft Corp. (NASDAQ 🙂 and Amazon.com Inc (NASDAQ :). The trio gained between 0.6% and 2.4%.
The broader technology sector rose 1% and the NYSE FANG + TM Index rose 1.7% to # 12 in a row.
The S&P 500 hit record highs on Wednesday, Thursday and Friday last week.
“While (the J&J News) can create some volatility in the short term, investors have been fairly confident in a full economic recovery,” said Mike Loewengart, managing director, investment strategy, E * TRADE Financial.
That fell by 68.13 points or 0.2% to 33,677.27; the S&P 500 gained 13.6 points or 0.33% to 4,141.59; and the Nasdaq Composite added 146.10 points, or 1.05%, at 13,996.10.
The volatility index, which reflects the lack of market volatility, hit a new 14-month low of 16.65.
“This year, 20 had proven to be a bit down to earth, but what we’ve seen since the beginning of this month is break that level and establish its trading range in mid-teens, which is noteworthy to the general public in a risk environment at the start of earnings season” said Greg Boutle, head of US equity and derivatives strategy at BNP Paribas (OTC :).
The first quarter earnings season begins Wednesday with Goldman Sachs (NYSE :), JPMorgan (NYSE :), and Wells Fargo (NYSE 🙂 reporting.
Analysts believe earnings for S&P 500 companies are up 25% year over year, due to the strength of consumer staples and financial companies, according to Refinitiv IBES data.
Cryptocurrency and blockchain companies Riot Blockchain (NASDAQ 🙂 and Marathon Digital Holdings rose 15% and 1.9%, respectively, as bitcoin prices rose 5 a day before the listing of Coinbase, the largest US cryptocurrency exchange , 6% increased.
The volume on the US stock exchanges was 9.3 billion shares compared to the average of 11.4 billion in the last 20 trading days.
Progressive issues outperformed declining issues on the NYSE by a ratio of 1.06 to 1; On Nasdaq, a ratio of 1.11 to 1 favored declines.
The S&P 500 posted 43 new 52-week highs and one new low. The Nasdaq Composite made 60 new highs and 81 new lows.