S&P 500, Nasdaq post record closes on dovish Fed taper-talk

THE S&P 500 and Nasdaq topped their record closes once again on Monday, bolstered by technology stocks, as last week’s dovish comments from the Federal Reserve on tapering its monetary stimulus refocused investors’ minds on economic growth.

It was the fourth record closing high in five sessions for the S&P, and the fifth in six sessions for the Nasdaq, runs only interrupted by jitters ahead of Fed Chair Jerome Powell’s Jackson Hole speech.

Ultimately, these worries were unfounded as Mr. Powell said on Friday the central bank would continue to be cautious in its approach to tapering its massive pandemicera stimulus, while reaffirming a steady economic recovery.

“It’s now clear that there’s going to still be an extraordinary amount of support for this economy, probably until November,” said Ed Moya, senior market analyst for the Americas at OANDA.

With this in mind, investors turned to high-growth tech stocks which tend to benefit from expectations of lower rates because their value rests heavily on future earnings.

Apple, Inc. jumped 3% to an alltime high, while Microsoft Corp., Amazon.com, Google-owner Alphabet, Inc. rose between 0.4% and 2.1%, helping the tech-heavy Nasdaq outperform the S&P 500 and the Dow.

The benchmark index is tracking its longest monthly winning streak since 2018 on the promise of easy money, with investors shrugging off signs of a slowing economic recovery and surging COVID-19 cases.

The S&P 500 has risen 3% so far in August — a seasonally weak period for stocks — and Wells Fargo analysts said last week they expect the index to rise another 8% by the end of the year.

It is also on track to log one of its best year-to-date returns through August of the past six decades, said Chris Larkin, managing director of trading at E*Trade Financial.

The S&P 500 gained 19.42 points, or 0.43%, to 4,528.79 and the Nasdaq Composite added 136.39, or 0.9%, to 15,265.89. The Dow Jones Industrial Average fell 55.96, or 0.16%, to 35,399.84,

While US crude prices rose 0.7% on Monday, energy stocks broadly slipped as investors fretted about possible longer-term impacts from Hurricane Ida, which roared ashore on Sunday near Port Fourchon, Louisiana, a major hub for the US offshore oil industry.

The energy index fell 1.2%, with only the financials benchmark dropping further on the day, as bank stocks reacted to falling bond yields.

PayPal Holdings, Inc. advanced 3.6% on a CNBC report that the financial services firm was exploring the development of a stocks trading platform for its US customers. The news helped send Robinhood Markets, Inc. down 6.9%.

Volume on US exchanges was 8.77 billion shares, compared with the 8.95 billion average for the full session over the last 20 trading days.

The S&P 500 posted 77 new 52-week highs; the Nasdaq Composite recorded 153 new highs and 34 new lows. —