S&p, Nasdaq Rise As Tech Stocks Back In Favor
The S&P 500 and the Nasdaq rose on Tuesday as tech stocks were back in demand after a post-election drubbing, while the Dow took a breather following a six-day rally.
The S&P technology sector, which had fallen about 3 percent since Donald Trump’s shock victory, rose 1.29 percent.
Microsoft’s 1.62 percent rise gave the biggest boost to the S&P and the Dow, followed by Amazon and Alphabet.
“The underlying fundamentals of the economy hasn’t really changed and if the economy is strong that will lead to more capital spending which should benefit tech stocks,” said Mark Watkins, regional investment manager at the Private Client Group at U.S. Bank in Park City, Utah.
Both the S&P and the Dow had rallied in the past week since Trump’s victory on expectations of higher fiscal spending and lower regulations in the financial and environmental sectors.
However, investors remain uncertain about the details of Trump’s policies and are also keeping an eye on key appointments in his administration.
“Last week’s rally was basically a digestion of Trump’s win and now that we’re past the digestion phase, the market is taking a bit of a breather and is waiting to see what lies ahead under a Republican government,” said Watkins.
At 10:56 a.m. ET, the Dow Jones industrial average was down 33.83 points, or 0.18 percent, at 18,834.86, the S&P 500 was up 6.34 points, or 0.29 percent, at 2,170.54 and the Nasdaq Composite was up 40.32 points, or 0.77 percent, at 5,258.72.
Seven of the 11 major S&P sectors were higher, with the energy index’s 2.14 percent rise leading the advancers.
The financial index, which rose more than 10 percent since the election, fell 1.18 percent as traders cashed in on profits.
Oil prices jumped more than 4 percent, bouncing back from multi-month lows on expectations that OPEC will agree later this month to cut production to reduce a supply glut. [O/R]
Oil majors Exxon and Chevron were up about 1.8 percent.
U.S. retail sales rose more than expected in October as households bought motor vehicles and a range of other goods. The Commerce Department said on Tuesday retail sales increased 0.8 percent last month, above the 0.6 percent increase forecast by economists.
Boston Fed President Eric Rosengren said on Tuesday only “significant negative news” could derail the Fed’s high expectations for raising U.S. interest rates next month.
The central bank is widely expected to raise interest rates at its next meeting in December. Traders have priced in an 86 percent chance, according to CME Group’s FedWatch tool.
Home Depot fell 2.1 percent to $125.13 after the No. 1 U.S. home improvement chain reported strong third-quarter results but stood pat on its full-year sales forecast, implying a weaker-than-expected fourth quarter. The stock was the biggest drag on the Dow.
Advancing issues outnumbered decliners on the NYSE by 1,855 to 1,064. On the Nasdaq, 1,353 issues fell and 1,298 advanced.
The S&P 500 index showed 17 new 52-week highs and two new lows, while the Nasdaq recorded 93 new highs and 13 new lows.