Tech stock rally sends S&P 500 and Nasdaq to record highs
June 28 (Reuters) – The Nasdaq and S&P 500 hit all-time highs on Monday, fueled by tech stocks as investors expect a robust earnings season while interest rates remain low.
Big tech companies including Facebook Inc (FB.O), Netflix Inc (NFLX.O), Twitter Inc (TWTR.N) and Nvidia Corp (NVDA.O) were among the biggest boosts to the S&P 500 and the Nasdaq.
The S&P 500 continued its recent momentum after paring some earlier losses, recording its third record high in a row, after logging its best weekly performance in 20 weeks last Friday.
In contrast, cyclical sectors dropped sharply amid fears over a spike in COVID-19 cases across Asia. Financials (.SPSY) and energy (.SPNY) posted the biggest sectoral loss on S&P 500, down by 0.81% and 3.33%, respectively.
“It’s end of the quarter and investors may want to take some profits and rotate out of energy and stick with tech,” said Sam Stovall, chief investment strategist at CFRA Research in New York.
Stovall expects stocks should continue their near-term climb as investors await the new earnings season, in which year-over-year earnings growth of S&P 500 companies is expected to top 60%.
The Dow Jones Industrial Average (.DJI) fell 150.57 points, or 0.44%, to close at 34,283.27. The S&P 500 (.SPX) pared earlier losses and advanced from Friday’s record high by gaining 9.91 points, or 0.23%, to 4,290.61. The Nasdaq Composite (.IXIC) added 140.12 points, or 0.98%, to 14,500.51.
Both the S&P 500 and the Nasdaq hit a series of record highs last week. the tech-heavy Nasdaq’s 5% gain in June is outpacing its peers as investors pile back in to tech-oriented growth stocks on diminishing worries about runaway inflation.
Dividers are seen inside a trading post on the trading floor as preparations are made for the return to trading at the New York Stock Exchange (NYSE), May 22, 2020. REUTERS/Brendan McDermidRead More
“We believe with the Fed putting a realistic goal post, investors now have much more of a risk-on mentality going into the second half of the year. A lot of these tech names have underperformed, while fundamentals were very robust going into the June quarter,” said Wedbush Securities analyst Daniel Ives, who expects the Nasdaq to hit 16,000 by year-end.
Facebook jumped over 4% as a U.S. judge granted the company’s motion to dismiss a Federal Trade Commission lawsuit. read more The social media giant finished Monday with over $1 trillion in market capitalization.
On the Nasdaq 100, the largest gainer was Nvidia Corp , which rose 5.0% after major chip makers Broadcom Inc (AVGO.O), Marvell (MRVL.O) and Taiwan-based MediaTek (2454.TW) endorsed its $40 billion deal to buy UK chip designer Arm. read more
With the S&P 500 up almost 14% as the first half of 2021 draws to a close, activity in some areas of the market indicates concern over potential volatility, with some investors suggesting the market may be overdue for a significant pullback.
On the economic front, investor attention will be focused on consumer confidence data, a private jobs report and a crucial monthly employment report due later this week. Quarterly results from Micron Technology Inc (MU.O) and Walgreens Boots Alliance (WBA.O) are also slated for this week.
Declining issues outnumbered advancing ones on the NYSE by a 1.38-to-1 ratio; on Nasdaq, a 1.09-to-1 ratio favored decliners.
The S&P 500 posted 36 new 52-week highs and no new lows; the Nasdaq Composite recorded 100 new highs and 31 new lows.
Volume on U.S. exchanges was 9.55 billion shares, compared with the 11.17 billion average for the full session over the last 20 trading days.Reporting by Krystal Hu in New York Additional reporting by Medha Singh and Devik Jain in Bengaluru Editing by Maju Samuel and Matthew Lewis
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