Tech stocks pushed Wall Street’s main indexes higher on Tuesday as positive U.S. factory data fueled optimism around an economic rebound, while investors looked for continued support from the Federal Reserve as its two-day meeting got underway.
The tech index jumped 0.9% as it continued to recover from a brutal sell-off earlier this month that knocked the S&P 500 and Nasdaq off their all-time highs.
Apple Inc rose 0.6% ahead of a virtual product launch, where it is expected to unveil updated watches and iPads, but no iPhones.
“The technology stocks in many ways have 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.”
In its first policy meeting since Fed Chair Jerome Powell announced a more accommodative stance on inflation, the central bank could switch its Treasury purchases toward more long-dated debt to keep long-term yields low, some strategists said.
Expectations from the Fed have increased amid a stalemate in talks for fiscal relief and economic reports suggesting an uneven recovery from the coronavirus-induced recession.
Data on Tuesday showed U.S. factory output increased strongly in August. Separately, U.S. import prices increased more than expected for the same month, supporting the view that inflation pressures were building up.
Earlier in the day data showed China’s industrial output accelerated the most in eight months in August.
At 10:43 a.m. ET, the Dow Jones Industrial Average was up 125.47 points, or 0.45%, at 28,118.80, the S&P 500 was up 23.72 points, or 0.70%, at 3,407.26. The Nasdaq Composite was up 104.07 points, or 0.94%, at 11,160.72.
Tesla Inc jumped 4.2%, rising for the fifth day, as anticipation heats up for its “Battery Day” event next week, where Chief Executive Officer Elon Musk is expected to tout the latest improvements in the electric-car maker’s battery technology.
Carnival Corp slid 8.8% after it warned of a quarterly loss of $2.9 billion, as the COVID-19 pandemic brought the cruise industry to a virtual standstill.
Citigroup Inc dropped 3.5% following a report that federal regulators were preparing to reprimand the U.S. lender for failing to improve its risk-management systems.
Advancing issues outnumbered decliners for a 2.01-to-1 ratio on the NYSE and a 1.75-to-1 ratio on the Nasdaq.
The S&P index recorded 16 new 52-week highs and no new low, while the Nasdaq recorded 53 new highs and nine new lows.
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