Wall Street Inches Higher as Momentum Stocks Push S&P 500, Nasdaq to New Highs
U.S. stocks surged on Wednesday, pushing the S&P 500 to its fourth straight record closing high, as investors stayed focused on large-cap momentum stocks that have outperformed since the onset of the coronavirus pandemic.
The Nasdaq also set an all-time closing high, its 39th year-to-date, compared with a total of 31 reached in all of 2019.
The Dow, which remains about 4% below its pre-COVID record, posted a more modest gain.
The MSCI world equity index surged past its February high to reach a record peak.
Salesforce.com , the cloud computing company and soon-to-be Dow component, saw its shares soar following its beat-and-raise earnings report.
“Your three highest sectors are all the mega-cap tech and tech-related stocks,” said Joseph Sroka, chief investment officer at NovaPoint in Atlanta. “So that notion of large-cap tech leading the market is in play today.”
“There’s this confidence that regardless of what happens with COVID, these companies have proven that they’re open for business.”
Supporting that thesis, Netflix Inc shares had their best day in over three years. The stay-at-home favorite has surged about 67% since the final closing bell of 2019.
Energy was the biggest percentage loser among S&P 500 sectors, as Hurricane Laura bore down on the Texas-Louisiana coastline, posing the largest threat to U.S. energy assets since 2005’s Hurricane Katrina. The coming storm, now a Category 4, prompted crude producers and refiners to shut down their facilities.
Commercial air carrier stocks lost altitude even after the White House announced President Donald Trump was weighing an executive action to avoid massive layoffs in the sector.
The U.S. Federal Reserve is expected to unveil a new framework intended to soften the central bank’s inflation stance, which Chairman Jerome Powell is expected to address during his remarks on Thursday as part of the Kansas City Fed’s virtual Jackson Hole symposium.
Communications services led the 11 major sectors in the S&P in percentage gains.
Second-quarter earnings season has wound down, with 483 of the companies in the S&P 500 having reported. Of those, 82.2% have beaten consensus, according to Refinitiv data.
In aggregate, analysts now see earnings for the April to June quarter having dropped by 29.9% year-on-year, according to Refinitiv.
Hewlett Packard Enterprise Co ended the session higher after its full-year profit outlook beat expectations, while tax software firm Intuit Inc advanced on a 17% rise in quarterly revenue.
Apparel retailer Nordstrom Inc tumbled in the wake of posting bigger-than-expected quarterly losses after being forced by mandated lockdowns to shutter its stores for much of the quarter.