Tech Stocks Lead Nasdaq Higher

Tech Stocks Lead Nasdaq Higher


Technology stocks climbed Monday, extending a robust 2020 rally that has propelled much of the market’s gains since March.

The Nasdaq Composite Index, home to many of the U.S.’s biggest tech stocks, outperformed its peers. The benchmark ticked up 62.17 points, or 0.5%, to 12440.04, bringing its gains for the year to 39%.

The S&P 500 edged down 15.97 points, or 0.4%, to 3647.49. The tech sector was the only of the index’s 11 groups to finish the day in the green.

The Dow Jones Industrial Average slipped 184.82 points, or 0.6%, to 29861.55, reversing a morning gain of as much as 279 points. The S&P and Dow are up 13% and 4.6%, respectively, for the year.

All three indexes opened higher on optimism that talks for additional fiscal stimulus are progressing and the rollout of Covid-19 vaccines could help stem the pandemic. But stocks pulled back as the session progressed as investors fretted about the potential for further lockdown measures.

U.S. lawmakers on Sunday signaled a growing willingness to compromise on the most contentious issues that have held up the passage of a fresh coronavirus-relief package in recent months. Leadership from both parties indicated they might look to pass a narrower spending bill. Investors continue to bet that a deal will be struck, and the additional spending will help bolster the economic rebound.

A nurse in New York was among the first to receive the Pfizer-BioNTech vaccine shot Monday morning. WSJ explains how America’s most urgent vaccination campaign in decades is rolling out. Photo: Mark Lennihan/Associated Press

“In the U.S., it is all about fiscal policy,” said Justin Onuekwusi, head of retail multiasset funds at Legal & General Investment Management. “The markets have priced some of this in and believe it is going to happen.”

Pfizer

started shipping its Covid-19 vaccine in the U.S., bolstering optimism that rising infection levels may be checked in coming months and prompt an end to restrictions on social and business activity. An end to lockdowns would improve the outlook for companies whose operations have been disrupted this year by the pandemic.

The vaccine “gives you greater certainty around the earnings numbers for 2021 and 2022 because there is a lesser probability of lockdowns,” Mr. Onuekwusi said. “The longer you spend at lower earnings levels, the more companies start to get into trouble because demand isn’t there, and then you get this permanent economic scaring.”

In corporate news, shares of

Alexion Pharmaceuticals

rose $35.33, or 29%, to $156.31 after

AstraZeneca

agreed to buy the Boston-based company for $39 billion in cash and stock.

Shares of vaccine makers wavered after the U.S. Food and Drug Administration authorized Pfizer’s and partner

BioNTech’s

shot on Friday. Pfizer slid $1.91, or 4.6%, to $39.21, while

Moderna

fell $1.86, or 1.2%, to $155.07.

Novavax

climbed $4.82, or 3.9%, to $129.70.

Pfizer started shipping its Covid-19 vaccine in the U.S., dispatching trucks from a Michigan plant.



Photo:

chandan khanna/Agence France-Presse/Getty Images

“The other thing that we’re watching closely is the sentiment from Americans on who will get vaccinated,” said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors. “We’ve seen that improve over the past couple months where more Americans say that they will take the vaccine. The full distribution of this vaccine is very important for it to work for the long term.”

Ms. Horneman said she also is monitoring the pandemic-related business closures in the short term as some states call for restaurants to temporarily halt indoor dining. “That’s going to have an impact on some of the economic data we’ll see in January and February,” she said.

Pluralsight

rose $1.21, or 6.4%, to $20.19 after private-equity firm Vista Equity Partners agreed to buy the educational-software maker.

In bond markets, the yield on the 10-year U.S. Treasury note declined to 0.891%, down 1.018 percentage points in the year to date.

Overseas, the pan-continental Stoxx Europe 600 rose 0.4%.

Investors are hopeful that the U.K. and the European Union will strike a trade deal after both sides agreed to continue negotiations past a Sunday deadline. Officials said they were narrowing differences over some of the issues that have bedeviled the talks.

“The fact that the talks are continuing has left a spark of hope that both sides do want to find compromise,” said Jane Foley, head of foreign-exchange strategy at Rabobank.

Indexes in Asia were mixed. China’s Shanghai Composite Index advanced 0.7%, and Japan’s Nikkei 225 edged 0.3% higher. South Korea’s Kospi declined 0.3%.

Write to Caitlin Ostroff at [email protected] and Amber Burton at [email protected]

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