Nasdaq closes higher with technology stocks back in favor

By Sinéad Carew (Reuters) - The Nasdaq closed higher on Wednesday as investors switched back to technology stocks and away from economically sensitive sectors as they weighed COVID-19 vaccine progress against a virus surge and likely timing for a economic rebound.

Reuters November 12, 2020 03:05:11 IST
Nasdaq closes higher with technology stocks back in favor

Nasdaq closes higher with technology stocks back in favor

By Sinéad Carew

(Reuters) - The Nasdaq closed higher on Wednesday as investors switched back to technology stocks and away from economically sensitive sectors as they weighed COVID-19 vaccine progress against a virus surge and likely timing for a economic rebound.

After falling sharply for two days, the tech-heavy Nasdaq <.IXIC> was boosted by "stay-at-home" stocks such as Microsoft , Amazon.com Inc , Apple Inc and Netflix Inc , which advanced in Wednesday's session.

Monday's encouraging late-stage coronavirus vaccine trial data had prompted a two-day rotation away from technology stocks into sectors that typically outperform coming out of a recession such as industrials <.SPLRCI>, materials <.SPLRCM> and energy <.SPNY>.

But investors changed gears Wednesday to buy the S&P growth index <.IGX>, which includes the less economically sensitive technology stocks, and sell the value index <.IVX>, which includes banks and energy stocks.

"We'll probably have these fits and starts of the rotation until we get into the spring," said Shawn Snyder, head of Investment Strategy at Citi Personal Wealth Management. "There's still really strong earnings for these technology companies and you're still facing a potential surge in COVID cases through the winter months and renewed restrictions and lockdowns."

Also, the top U.S. infectious disease specialist urged caution until vaccines are distributed, as California and states across the U.S. Midwest and the Northeast tightened restrictions aimed at containing the virus spread.

As the restrictions were announced, shares of retailers such as Macy's fell along with restaurant owners including Darden Restaurants . The small cap S&P 600 consumer discretionary index <.SPSMCD> also lost ground.

"To think the style we've been living our lives in for the last nine months is suddenly going to change is a bit optimistic. Its going to take longer," said Citi's Snyder.

Unofficially, the Dow Jones Industrial Average <.DJI> fell 6.18 points, or 0.02%, to 29,414.74, the S&P 500 <.SPX> gained 26.8 points, or 0.76%, to 3,572.33 and the Nasdaq Composite <.IXIC> added 227.52 points, or 1.97%, to 11,781.37.

"The story of the week and what's persisting today is the almost see-saw, barbell view in the market between growth, tech and stay-at-home investments versus the more cyclical value investments that are tied to the broader rebound and recovery in the economy," said Craig Fehr, investment strategist at Edward Jones in St. Louis, Missouri.

"The broad view is the greater optimism for the longer term view of the economy, post vaccine, post pandemic. We're seeing a little bit of that shine come off it today."

Markets, which also got a boost after Democrat Joe Biden was declared the projected the winner of the U.S. election, have shrugged off legal challenges from President Donald Trump as no evidence of problems with votes has so far been produced.

The Democratic Party retained control of the U.S. House of Representatives with a lower majority, the Associated Press reported. As a result investors are now focused on whether they can wrestle Senate control from Republicans, which will not be decided until special elections in January.

Democrats may not be able to win enough votes for their larger economic stimulus plan if Republicans retain a Senate majority.

Lyft Inc rose after the ride-hailing app said it was working on a new service to take a slice of the burgeoning food-delivery market, as it works to make up for a drop in quarterly revenue.

The Philadelphia SE chip index <.SOX> gained ground after suffering sharp losses on Tuesday.

(Additional reporting by Medha Singh and Shivani Kumaresan in Bengaluru, Sinead Carew in New York; Editing by Sriraj Kalluvila, Shounak Dasgupta, Arun Koyyur and Tom Brown)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.