Tech stocks pushed major Wall Street indices higher on Tuesday, with positive data from U.S. factories fueling optimism around an economic rebound, while investors sought continued support from the Federal Reserve as its meeting of two days began.
The tech index jumped 0.9% as it continued to recover from a sharp sell-off earlier this month that brought the S&P 500 and Nasdaq down from their all-time highs.
Apple Inc was up 0.6% ahead of a virtual product launch, where it is expected to unveil updated watches and iPads, but no iPhones.
“Tech stocks have in many ways become the new defensive stocks … in a world of extremely low interest rates, these stocks have offered good returns,” said Anik Sen, global head of equities at PineBridge Investments.
“The most visible growth becomes a safe haven in many ways.”
At its first policy meeting since Fed Chairman Jerome Powell announced a more dovish stance on inflation, the central bank could shift its Treasury purchases toward longer-term debt to maintain long-term yields. low term, said some strategists.
Fed expectations have risen in a stalemate in budget relief negotiations and economic reports suggesting an uneven recovery from the coronavirus-induced recession.
Data on Tuesday showed that production at US factories rose sharply in August. Meanwhile, US import prices rose more than expected for the same month, confirming the idea that inflationary pressures were building.
Earlier today, data showed that China’s industrial production accelerated the most in eight months in August.
At 10:43 am ET, the Dow Jones Industrial Average was up 125.47 points, or 0.45%, to 28,118.80, the S&P 500 was up 23.72 points, or 0.70%, at 3407.26. The Nasdaq Composite rose 104.07 points, or 0.94%, to 11,160.72.
Tesla Inc jumped 4.2%, up for day five, as anticipation heats up for its “Battery Day” event next week, where CEO Elon Musk is expected to tout the latest improvements in battery technology of the electric car manufacturer.
Carnival Corp slipped 8.8% after warning of a quarterly loss of $ 2.9 billion as the COVID-19 pandemic virtually crippled the cruise industry.
Citigroup Inc fell 3.5% following a report that federal regulators were preparing to reprimand the US lender for failing to improve its risk management systems.
Rising issues outnumbered declines for a ratio of 2.01 to 1 on the NYSE and 1.75 to 1 on the Nasdaq.
The S&P Index recorded 16 new 52-week highs and no new lows, while the Nasdaq recorded 53 new highs and nine new lows.
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