Gains For Some Tech Giants Nudge S&P To Another Record High
(AP) — Technology companies helped lift stocks higher on Wall Street, nudging the S&P 500 to its third straight all-time high, even as other parts of the market faltered.
A burst of buying in the final 10 minutes of trading sent the benchmark index 0.2% higher. The S&P 500 had been down 0.3% earlier amid another bout of choppy trading as Wall Street awaits the latest take from the Federal Reserve on inflation.
Investors are trying to gauge the strength of the economic recovery and whether emerging signs of inflation will be transitory, as the central bank believes. The Fed delivers its interest rate policy update Wednesday afternoon.
“Most of this is just positioning in front of the Fed later this week,” said Willie Delwiche, investment strategist at All Star Charts. Investors are “trying to get a sense of not just what the Fed is going to say in terms of announcements, but what they expect in terms of the path of monetary policy and the economy going forward.”
The S&P 500 added 7.71 points to 4,255.15. The index has notched a weekly gain three weeks in a row. The Dow Jones Industrial Average fell 85.85 points, or 0.2%, to 34,393.75. The Nasdaq rose 104.72 points, or 0.7%, to 14,174.14.
Small-company stocks fell. The Russell 2000 index lost 9.66 points, or 0.4%, to 2,326.15.
Among the tech sector winners Nonday were Apple, which rose 2.5%, and Adobe, which gained 2.9%. Several large communications companies also made gains. Facebook rose 1.7% and Netflix gained 2.3%. Those gains offset a broad decline in financial, industrial and materials stocks, among others. JPMorgan dropped 1.7%.
Wall Street is trying to gauge the strength of the economic recovery, the impact rising inflation is having on its trajectory, and the Fed’s next move.
Investors have been worried that the Fed could ease up on bond purchases and other stimulus measures as the economy recovers. No policy changes are expected immediately, but comments on a shift in policy could jostle an already skittish market.
Fed officials have maintained that any rise in inflation will be temporary as the economy recovers.
“There’s still this debate on inflation and, notwithstanding what the Fed does and whether yields move down, there’s still some upward pricing pressure,” said Tom Martin, senior portfolio manager with Globalt Investments.
A boost in demand for goods has helped fuel a rise in the cost of everything from food to cars and household goods. Shipping costs are also rising and adding to the increase in prices. The uncertainty over inflation has been fueling much of the back-and-forth in the market between stocks that are considered safer value holdings versus those with more potential for sharp growth.
“As you go into the summer and you have uncertainty about inflation, the fed and the stimulus, you’ll kind of see people neutralizing bets,” Martin said.
Lordstown Motors sank 18.8% after the CEO and CFO resigned as problems mount for the startup electric truck maker.
Novavax gave up an early gain, dropping 0.9%. The vaccine maker said its COVID-19 shot was highly effective against the disease and also protected against variants in a large study in the U.S. and Mexico. The company is facing raw-material shortages, though, and plans to seek authorization for the shots by the end of September.
Bond prices fell, sending yields mostly higher. The yield on the 10-year Treasury note rose to 1.50% from 1.46% late Friday.
“You don’t get a message from the bond market that it’s worried either about persistent inflation or about the Fed doing something dramatic in terms of not being the buyer of bonds that it has been in recent quarters,” Delwiche said.
European markets were mostly higher. Several markets in Asia were closed for a holiday.
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