Tech stocks extend S&P 500's rally to seventh straight session
(Reuters) – The S&P 500 rallied for the seventh straight session on Friday, powered by tech stocks, prospects of super-low interest rates for a prolonged period and hopes of a medical solution to the COVID-19 pandemic.
The tech sector’s 0.6% rise provided the biggest boost to the benchmark index. Energy stocks advanced 0.8% as Hurricane Laura passed the heart of the U.S. oil industry in Louisiana and Texas without causing any widespread damage to refineries.
“Technology has kind of become the recession play. With everybody piling in into it, the momentum is certainly on technology’s side,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.
“Equity markets are in kind of a risk on trade. It’s a recognition that the Fed is probably not going to be touching interest rates for quite some time.”
The Federal Reserve on Thursday unveiled a plan to support inflation and restore the U.S. economy from its biggest downturn since the Great Depression.
Data on Friday showed U.S. consumer spending increased more than expected in July, though momentum is likely to ebb as the COVID-19 pandemic lingers and fiscal stimulus dries up with no sight of the next round of a coronavirus relief package.
The S&P 500 and the Nasdaq have scaled record highs and the benchmark is on track for its best August in 34 years, partly powered by a rally in technology stocks, while the blue-chip Dow flirted with its break-even level for 2020.
Progress in the race to develop treatments and vaccines for COVID-19 have also added to the cheer. Johnson & Johnson’s Janssen unit said it would expand testing for its experimental coronavirus vaccine to Spain, the Netherlands and Germany next week.
Meanwhile, the U.S. election campaign entered its final stretch with U.S. President Donald Trump’s Republican nomination for a second term. Analysts expect market volatility to increase again ahead of voting in November.
At 11:10 a.m. ET, the Dow Jones Industrial Average was up 62.28 points, or 0.22%, at 28,554.55, the S&P 500 was up 5.92 points, or 0.17%, at 3,490.47. The Nasdaq Composite was up 53.23 points, or 0.46%, at 11,678.57.
United Airlines rose 2.1% as it prepared for the biggest pilot furloughs of its history, a day after announcing the need to cut 21% jobs this year.
Coca-Cola Co gained 1.4% as announced plans to nearly halve its operating units and offer voluntary separation to 4,000 workers.
In the latest sign that technology companies are booming in the pandemic, business software provider Workday Inc jumped 11.5% after raising its annual subscription forecast and Dell Technologies Inc gained 5.1% after reporting a quarterly profit beat.
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Tesla Inc and Apple Inc rose 1.7% and 0.3% ahead of their stock splits that take effect on Monday.
Advancing issues outnumbered decliners by a 1.49-to-1 ratio on the NYSE and by a 1.35-to-1 ratio on the Nasdaq.
The S&P index recorded 13 new 52-week highs and no new low, while the Nasdaq recorded 59 new highs and 11 new lows.
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