Wall St. ends day higher as tech stocks rally again

Los Angeles Times - - ELECTION 2020 - As­so­ci­ated press

Stocks on Wall Street over­came a late burst of sell­ing and closed up Tues­day, as gains in big tech­nol­ogy com­pa­nies out­weighed losses in banks and else­where in the mar­ket.

Af­ter be­ing up 1.1% ear­lier in the day, the Stan­dard & Poor’s 500 in­dex ended with a gain of 0.5%. It’s the sec­ond straight siz­able gain for the bench­mark in­dex fol­low­ing its worst week since June.

High­fly­ing tech­nol­ogy stocks, which have been driv­ing up the mar­ket through­out the pan­demic, abruptly lost al­ti­tude this month amid wor­ries that their prices had sim­ply climbed too high, even af­ter tak­ing into ac­count their tremen­dous growth.

But the last two days marked a re­ver­sal of that trend, with shares in tech firms — as well as other com­pa­nies that play a key role in on­line ac­cess and com­merce — climb­ing again. Mi­crosoft rose 1.6% on Tues­day, Ama­zon gained 1.7%, and Zoom Video climbed 1.8%.

A key rea­son tech stocks are climb­ing again is that in­vestors still ex­pect that the com­pa­nies’ prof­its will boom as even more of daily life shifts on­line.

“The things that are do­ing well or are ben­e­fi­cia­ries or are work­ing in this en­vi­ron­ment, for good rea­son, are the things that are go­ing up,” said Tom Martin, se­nior port­fo­lio man­ager with Glob­alt In­vest­ments. “That isn’t go­ing to change un­til we get a no­table change in one of the things that are un­cer­tain — the virus it­self and the ef­fect that’s hav­ing on the econ­omy — and whether we get any­thing new on the fis­cal stim­u­lus front.”

The S&P 500 rose 17.66 points to 3,401.20. The Dow Jones in­dus­trial av­er­age inched up 2.27 points, or less than 0.1%, to 27,995.60. The

Nas­daq com­pos­ite, which is heav­ily weighted with tech stocks, climbed 133.67 points, or 1.2%, to 11,190.32.

Stocks of smaller com­pa­nies eked out a tiny gain. The Rus­sell 2000 in­dex of small­caps rose 1.18 points, or 0.1%, to 1,538.15.

Be­cause tech com­pa­nies have grown so mas­sive, their move­ments alone can dic­tate the mar­ket’s per­for­mance more than ever. Tech stocks as a group ac­count for nearly 28% of the S&P 500, and they’re up 3.1% this week af­ter fall­ing more than 4% in each of the prior two weeks.

An­a­lysts ex­pect more volatil­ity for stocks in the months ahead as the mar­ket nav­i­gates un­cer­tainty over the still-strug­gling econ­omy, the out­come of the elec­tion and pes­simism that Democrats and Repub­li­cans in Wash­ing­ton will be able to reach a deal to send more aid to un­em­ployed work­ers.

In­vestors weighed a batch of mixed global eco­nomic data Tues­day.

Stocks in Europe and much of Asia rose af­ter re­ports show­ing re­tail sales in China were higher last month than a year ear­lier. That was China’s first such sales growth this year, af­ter the pan­demic hit its econ­omy. In Europe’s largest econ­omy, a read­ing on Ger­man eco­nomic con­fi­dence rose more than ex­pected.

A re­port showed that U.S. in­dus­trial pro­duc­tion strength­ened last month, but the growth wasn’t as strong as econ­o­mists were ex­pect­ing. Other re­ports showed that man­u­fac­tur­ing in New York state is ex­pand­ing more than econ­o­mists ex­pected, as are im­port and ex­port prices.

Trea­sury yields were rel­a­tively steady. The yield on the 10-year Trea­sury was at 0.67%, un­changed from late Mon­day. The 30-year yield rose to 1.44% from 1.41%.

Shorter-term rates re­main pinned at lower lev­els on ex­pec­ta­tions that the Fed­eral Re­serve will keep its bench­mark rate at nearly zero for some time to help the econ­omy re­cover. The cen­tral bank be­gan its lat­est meet­ing on in­ter­est-rate pol­icy Tues­day, and it will an­nounce its de­ci­sion Wed­nes­day. Econ­o­mists say it could change some of the lan­guage around its ex­ist­ing pledge to buy bonds to sup­port mar­kets, but they ex­pect no ma­jor news.

On the los­ing side was Car­ni­val, which dropped 10.8%, mak­ing it the big­gest de­cliner in the S&P 500. The cruise ship op­er­a­tor said it may sell as much as $1 bil­lion in stock to raise cash, and it re­ported a pre­lim­i­nary $2.9-bil­lion loss for its lat­est quar­ter. More en­cour­ag­ingly, it also said its ad­vance book­ings for the sec­ond half of 2021 are sim­i­lar to where book­ing po­si­tions were in 2018 for the sec­ond half of 2019, be­fore the coro­n­avirus pum­meled the in­dus­try.

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