Tuesday, December 1, 2020
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U.S. Stocks Open Higher, Led by Tech

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Technology shares lifted major indexes Wednesday after lagging earlier this week as promising vaccine news sent U.S. stocks rallying.

The S&P 500 rose 0.4%, led by its information-technology sector. The tech-heavy Nasdaq Composite climbed 1.4%, a reversal after two days in the red, with the help of heavily-weighted big tech stocks.
Amazon.com
shares advanced 2.1%, and
Microsoft
rallied 2.2%.

The Dow Jones Industrial Average ticked down 0.1%, or about 17 points, reversing earlier gains

Megacap tech stocks powered markets higher through 2020 but took a hit earlier this week as investors cheered progress toward a Covid-19 vaccine and began rotating into cyclical sectors such as manufacturing and energy.

“What we are seeing now is the classic saying that in the short term, the market is a voting machine, and in the long term, it is a weighing machine,” said Altaf Kassam, European head of investment strategy and research at State Street Global Advisors. “What we saw in the tech sector was that it was the FAANGs that bore the brunt of the selloff, but more broadly, tech didn’t do that bad. That was the knee-jerk reaction.”

The rollout of a Covid-19 vaccine is likely to power the global economic recovery and lift stocks across sectors, giving momentum to a new leg of the market’s rally, investors said.

“There is still a lot of money on the sidelines,” according to Mr. Kassam. “With the optimism that the vaccines could now come, [that] means that some of that money could start to drift back in.”

Still, some investors are focusing on the hurdles facing making a vaccine widely available, and questions about the size of the next fiscal stimulus package. Coronavirus hospitalizations set a record in the U.S. on Tuesday, a fresh reminder that the pandemic is far from over.

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“What you are seeing over the last 24 hours is a tug of war between those who see the vaccine as a close-your-eyes moment and those who want to look at the risks now,” said Jim McCormick, global head of desk strategy at Natwest Markets. “At the moment, the former group is winning.”

Among individual stocks, Lyft shares rose 6.2% after the ride-hailing company’s revenue and number of active riders climbed as lockdowns eased in some cities.

U.S. bond markets are closed Wednesday for Veterans Day. The yield on 10-year Treasurys has climbed for four straight days and ended Tuesday at 0.970%, its highest since March 19.

The Nasdaq Composite rose in morning trading as tech stocks regained some ground after retreating for much of the week.

The Nasdaq Composite rose in morning trading as tech stocks regained some ground after retreating for much of the week.

Photo: Michael Nagle/Bloomberg News

In commodities, oil prices extended their advance. Brent crude oil, the international benchmark, rose 2.5% to $44.70 a barrel. Data from the American Petroleum Institute late Tuesday showed a large drop in U.S. crude oil stockpiles, adding to the bullish sentiment on oil.

Overseas, the pan-continental Stoxx Europe 600 rose 0.9%. Major Asian equity benchmarks ended the day on a mixed note. Japan’s Nikkei 225 Index rose 1.8% to close at its highest level since 1991. South Korea’s Kospi rose 1.4% to its highest in over two years.

The main benchmarks in both Hong Kong and China ended the day lower. Shares in some of China’s biggest tech companies fell sharply for a second day.

The move echoed a pullback in U.S. tech stocks on Tuesday, and came after China released new draft antimonopoly rules for online platforms. The rules signaled an increased appetite by Beijing authorities to rein in its dominant technology companies.

Write to Will Horner at William.Horner@wsj.com