The S&P 500 hit an all-time high on Tuesday while the Nasdaq touched a two-week peak as technology stocks caught a bid ahead of the Federal Reserve’s two-day policy meeting.
The Nasdaq rose 0.7%, extending a rebound in tech-related stocks that were at the heart of February’s selloff. The index is now about 4% below its Feb. 12 record closing high.
Apple Inc rose 1.4% as Evercore ISI hiked its price target on the iPhone maker’s shares to the highest on Wall Street. Other mega-cap stocks including Facebook Inc, Netflix Inc, Alphabet Inc and Microsoft rose between 1% and 1.7%.
The Dow slipped on Tuesday after notching sixth consecutive intraday record highs as optimism over a $1.9 trillion fiscal stimulus package and ongoing vaccination drives bolstered views that the economy was on a path to recovery.
Scores of stimulus and improving economic data have stoked inflation worries, pushing up yields and upending equity markets in February.
Wall Street’s fear gauge hit a five-week low at 19.68 points as yields on the benchmark U.S. 10-year Treasury slipped for the second straight session to 1.59% from a 13-month high hit last week.
“Focus continues to be on longer-end Treasuries as the market factors in the possibility of the 10-year yield hitting 2%,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in New York.
Fears about an overheating economy and a jump-forward in interest rate have increased scrutiny on the Fed meeting, where policymakers are likely to raise economic forecasts and repeat their pledge to remain accommodative for the foreseeable future.
Investors have slightly increased their cash allocation, deeming that inflation and ‘taper tantrums’ could topple the record rally in financial markets, BofA’s March fund manager survey showed on Tuesday.
Latest data showed retail sales dropped more than expected in February due to bitterly cold weather across the country but a rebound is likely. Another report indicated winter storms in Texas led to a plunge in U.S. factory output last month.
At 10:07 a.m. ET, the Dow Jones Industrial Average fell 112.00 points, or 0.34%, to 32,841.46, the S&P 500 gained 4.45 points, or 0.11%, to 3,973.39 and the Nasdaq Composite gained 102.93 points, or 0.76%, to 13,562.64.
Energy stocks slumped about 3% on a drop in oil prices while financials retreated about 1.4%. Technology and communication services jumped over 1% each.
The Russell growth index climbed 0.9% versus the Russell value index’s 0.4% fall, in a slight reversal of recent trend away from technology and other high-growth stocks.
Ford Motor Co dropped about 3% after announcing a $2 billion convertible debt deal.
Declining issues outnumbered advancers by a 1.7-to-1 ratio on the NYSE and by a 1.6-to-1 ratio on the Nasdaq.
The S&P 500 posted 70 new 52-week highs and no new low, while the Nasdaq recorded 272 new highs and 29 new lows.
-Reuters