US Mar 22
The S&P 500 closed near record highs Monday, led by tech as investor appetite for growth stocks returned in the wake of a pullback in U.S. bond yields.
The Dow Jones Industrial Average rose 0.31%, or 102 points, the S&P 500 was up 0.70% to 3,940.42 just about 1% off its record closing high. The Nasdaq Composite was up 1.23%.
The United States 10-Year yield closed below 1.7% following a surge to 14-month highs last week, driven by technical factors that analysts say pushed rates too high too fast and will likely continue to subside.
The recent price action has been driven by overnight selling and U.S. banks holding back demand - all of which are "likely to temper or reverse," Morgan Stanley (NYSE:MS) said in a note.
Facebook (NASDAQ:FB), Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Amazon.com (NASDAQ:AMZN) and Google-parent Alphabet (NASDAQ:GOOGL) were in the green.
Tesla (NASDAQ:TSLA), meanwhile, also helped prop up the Nasdaq, though pared some gains to end above 2%. ARK fund manager Cathie Wood estimated that Tesla shares will rise to $3,000 by 2025.
iShares PHLX Semiconductor ETF (NASDAQ:chip stocks) inched higher despite ongoing supply-issues in the industry.
The decline in rates, however, triggered selling of rate-sensitive bank stocks, pushing financials and the broader value sector lower.
Sentiment on value stocks – which tend to rise in an improving economy – was also dented somewhat by a third wave of Covid-19 in Europe that threatens global demand.
United Airlines Holdings (NASDAQ:UAL), Delta Air Lines (NYSE:DAL) and American Airlines Group (NASDAQ:AAL) fell into the red, with the latter down about 4%, shrugging off data showing U.S. air travel hit one-year high.
The Transportation Security Administration said that it screened 1.5 million people on Sunday, the highest number of passengers it has seen on a single day since March 13 of last year.
The news of the fresh lockdown in Europe, however, comes amid positive vaccine news that will bolster efforts in the fight against the pandemic. AstraZeneca (NASDAQ:AZN) Covid-19 vaccine was found to be safe and 79% effective in the late-stage U.S. trials, paving the way for the drug maker to file an emergency use authorization from the Federal Food and Drug Administration in the coming weeks.
Energy stocks were paced by sluggish oil prices and investor jitters that lockdowns across Europe will stifle air travel, hurting demand for jet fuel.
In other news, U.S.-China trade tensions appear to be on the rise again after the U.S. imposed sanctions against two Chinese officials over alleged human rights abuses. The move came as the European Union, the United Kingdom and Canada took similar action against China.
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