NEW YORK, Aug 31 — The S&P 500 hovered near record highs today as bets on an economic revival due to prolonged central bank support put the index on course for its best August in decades.
The Federal Reserve’s commitment to tolerate inflation and keep interest rates low, positive developments in vaccines and treatments for COVID-19 and a momentum-driven rally in tech-focused stocks have helped the S&P 500 and Nasdaq hit consecutive all-time highs.
The Dow is within 3.5 per cent of its record close on Feb. 12. Trading in new entrants to the blue-chip index Salesforce.com Inc, Honeywell International Inc and Amgen Inc was subdued.
Ousted companies Exxon Mobil Corp slipped 1.6 per cent, Pfizer Inc dipped 0.3 per cent and Raytheon Technologies Corp was marginally higher.
“There is a reallocation of assets from sectors that are not performing, into sectors that are,” said Stan Gregor, chief executive officer of Summit Financial LLC in Parsippany, New Jersey.
“Right now the euphoria is stay long on technology and stay-at-home stocks.”
Technology stocks rose 0.3 per cent today and along with utilities were the only two major S&P sectors in positive territory.
The three main indexes are also set for their fifth straight monthly rise following March lows, with the S&P 500 looking at its biggest per centage rise in August since 1984, even as economic data pointed to an uneven recovery from the steep downturn.
China data showing a solid pace of expansion in the services sector this month lifted spirits at the start of the week. Focus will now be on the August US jobs report slated for Friday.
US presidential campaigns are set to take center-stage in the coming weeks with market volatility expected to spike ahead of polling in November.
At 09:53 a.m. ET, the Dow Jones Industrial Average was down 139.46 points, or 0.49 per cent, at 28,514.41, the S&P 500 was down 3.65 points, or 0.10 per cent, at 3,504.36. The Nasdaq Composite was up 35.35 points, or 0.30 per cent, at 11,730.98.
Among early movers, Aimmune Therapeutics Inc’s shares more than doubled after Swiss food group Nestle SA offered to pay $2 billion for full ownership of the peanut allergy treatment maker.
Apple Inc rose 2.6 per cent, while Tesla Inc gained 3.6 per cent, as their stocks became less costly after their pre-announced stock splits took effect.
Suitors for TikTok’s US assets, Microsoft Corp, Walmart Inc and Oracle Corp, dropped between 0.6 per cent and 2.4 per cent as China’s new rules around tech exports meant a deal with ByteDance could need Beijing’s approval.
Declining issues outnumbered advancers for a 2.07-to-1 ratio on the NYSE and a 2.00-to-1 ratio on the Nasdaq.
The S&P index recorded 20 new 52-week highs and no new low, while the Nasdaq recorded 49 new highs and seven new lows. — Reuters
