Tech gains push markets even higher
NEW YORK — Strength for tech stocks nudged U.S. indexes a bit further into record heights Monday, more than making up for losses across much of the rest of Wall Street.
The S&P 500 rose 9.91 points, or 0.2%, to 4,290.61 after drifting between small gains and losses for much of the day. It added to its alltime high set Friday as optimism builds about the strengthening economy and expectations that the Federal Reserve will keep interest rates low for a while longer.
Healthy gains for Nvidia, Facebook and other stocks that have been winners of the increasingly online world helped the Nasdaq composite also tick further into record heights. It rose 140.12, or 1%, to 14,500.51. But the majority of stocks in the S&P 500 and across Wall Street weakened, and the Dow Jones Industrial Average dropped 150.57, or 0.4%, to 34,283.27.
Trading was relatively quiet around the world, with European stocks modestly lower and several Asian indexes nearly unchanged.
The action was more notable in the bond market, where the yield on the 10year Treasury slumped to 1.47% from 1.53% late Friday. It was as high as 1.70% last month, but it’s been receding as worries about high inflation have calmed a bit.
The drop in longterm rates can crimp the profits banks make from lending money, and financial stocks were some of the biggest drags on the S&P 500. Wells Fargo slipped 1.3%, and Capital One Financial fell 2.5%.
But falling Treasury yields can also make the high price tags for highgrowth stocks easier to justify, and gains for tech stocks were the main reason for the S&P 500’s strength.
Apple rose 1.3%, Microsoft gained 1.4% and Intel climbed 2.8%. Nvidia jumped 5% after the Sunday Times in Britain reported several big customers of U.K. semiconductor company Arm came out in support of its proposed takeover by Nvidia.
Facebook climbed 4.2% after a federal judge dismissed antitrust lawsuits brought against it by the Federal Trade Commission and a group of state attorneys general.
Still, worries remain on Wall Street, and a measure of nervousness in the stock market ticked up by about 1%.
Some measures of the economy may have already hit their peaks after roaring out of the recession caused by the pandemic. Stock prices look expensive to critics after rising much faster than corporate profits. And inflation remains a worry, even if more investors have come around to the Federal Reserve’s view that it will be only a temporary problem.
Much of the choppiness in the markets is a result of the speed at which the economy has bounced back from its pandemic slump.
“When you come out of it rapidly it starts to raise concerns for investors, but I would remind them that we are still early in a cycle,” said Brian Levitt, global market strategist at Invesco. “I would expect this to play out over time.”
The next turning point for the market could come on Friday, when the U.S. government gives the latest monthly update on how many jobs the economy is creating and what wages are doing.
Economists expect the report to show that employers added 700,000 more jobs than they cut in June. That would be an acceleration following a couple months of disappointingly slow hiring.