US index hits all-time high as tech leaps

One of the US’S two main stock indices hit an all-time high yesterday even as the coronavirus pandemic continued to weigh on the global economy.

The S&P 500 hit as high as 3,399.54 and was up about 0.25 per cent when markets closed in Europe. It came on a positive day for other markets, and the FTSE 100 closed up 0.6 per cent to 6,111.98.

The S&P’S record has raised the issue of whether investors have “taken leave of their senses,” said David Miller, investment director at investment manager Quilter Cheviot.

“There are two ways of looking at this. Either investors are behaving rationally or this is a bubble of irrationality.

“The government has pumped billions of dollars into the economy to help it through the crisis but, as authorities print the money, people and businesses are putting it in bank accounts or into shares.”

He continued: “Whether this is a temporary phenomenon or not is to be seen. However, for now excess cash is being invested in financial assets.

“I would argue that this is not a bubble that is about to burst. Investors are behaving rationally. Indices have been driven higher by successful companies.

“The US tech giants are leading the way out of the Covid crisis, generating extra revenue during the lockdown and reopening.”

One of those giants, Apple, became a little more giant yesterday, breaching a $2 trillion (£1.5tn) valuation in a first for an American company. It comes less than two years since it became worth $1tn.

The pound dropped 0.3 per cent against the dollar to $1.3194, and 0.1 per cent against the euro to €1.1087.

In company news, a day after Frasers Group – formerly Sports Direct – revealed that chairman David Daly had bought 4,000 shares in the company by mistake in the runup to its results today, investors threw their weight behind the firm. Shares closed up 8 per cent at 305.8p despite the mis-step.

Easyjet shares landed up 3.3 per cent at 575p at the end of the session even as workers said they plan to protest outside the Southend, Stansted and Newcastle bases that the airline is set to close. The sites have about 670 staff.