Tech stocks power Nasdaq to new high

The Nasdaq ended at a record high on Tuesday, lifted by Amazon, Microsoft and other top-shelf tech companies as investors shifted their focus to growth stocks.

Microsoft rose 1.1 percent and its stock market value briefly breached us$2 trillion for the first time, while Apple, Facebook and Amazon also rallied more than 1 percent each.

Amazon had over US$5.6 billion in total online sales in the United States on the first day of its Prime promotional event, according to Adobe Digital Economy Index.

In a congressional hearing, meanwhile, Federal Reserve Chair Jerome Powell reaffirmed the US central bank’s intent to encourage a “broad and inclusive” recovery of the job market and not to raise interest rates too quickly based only on the fear of coming inflation.

So-called value stocks, expected to benefit from the economic recovery, have outperformed in 2021, while growth stocks, including major tech names like Apple and Nvidia, have rallied since the Fed last week took a stance on future rate hikes viewed by many as more aggressive than expected.

The S&P growth index has added almost 2 percent since before the Fed last Wednesday projected an accelerated timetable for interest rate increases, compared with a drop of almost 2 percent in the value index.

“The market was caught off guard regarding the Fed’s hawkish commentary, and that’s 100 percent of what is happening,” said Andrew Mies, chief investment officer of 6 Meridian. “All the smart people were surprised about how hawkish the Fed was, and now they are adjusting their portfolios.”

Nine of the 11 major S&P sector indexes rose, with consumer discretionary and tech the biggest gainers, each up about 1 percent.

The Dow Jones Industrial Average rose 0.2 percent to end at 33,945, while the S&P 500 gained 0.5 percent to 4,246.

The Nasdaq Composite climbed 0.8 percent to 14,253.

GameStop jumped 10 percent after the videogame retailer said it raised over US$1 billion in its latest share offering, cashing in further on this year’s Reddit-driven surge in its stock price.

Sanderson Farms rallied about 10 percent to a record high after JP Morgan raised its price target on the stock after a source told Reuters that the poultry producer was exploring a sale.

Twitter ended almost 3 percent higher after it said it will seek applications from users to test new content subscription and ticketing features, as the social platform works to build more ways for users to earn money.

Moderna rose 6.3 percent after the European Union decided to take up an option under a supply contract with the drugmaker that allows the bloc to order 150 million additional Covid-19 vaccines. (Reuters)