By Yasin Ebrahim
Investing.com – The S&P and Dow hit record highs on Thursday, led by surge in tech stocks on easing fears about a disorderly rise in U.S. rates, with some on Wall Street calling the recent selloff a “golden opportunity” to load up on growth.
The Dow Jones Industrial Average rose 0.98%, or 316 points, and had hit intraday record of 32,661.59, and the S&P 500 rose 1.44%, after hitting a record high of 3,960.60 and the Nasdaq Composite was up 2.7%.
“While it’s a ‘buckle the seat belt’ time for tech stocks, we believe this sell off has created a golden opportunity for investors to own the secular tech winners for the next 3-5 years,” Wedbush said in a note. The firm outlined FAANG, cloud, cyber security, 5G, and artificial intelligence stocks to lead the charge higher, underpinned by the growing digital transformation trend that is set to pick up speed.
Facebook (NASDAQ:FB), Apple (NASDAQ:AAPL), Amazon.com (NASDAQ:AMZN), Netflix (NASDAQ:NFLX) and Google-parent Alphabet (NASDAQ:GOOGL) were higher, pushing broader market to record highs, with easing fears about a disorderly rise in rates also playing a role in the reviving the growth trade.
The 10-year yield remained above 1.5%, but some market participants are backing rates to remain in check following auction results for the 10-year note on Thursday that suggested current rates were attractive enough for buyers.
Given the selloff in bond prices, which trade inversely to yields/rates, over the past month, there were concerns that the market wasn’t ready to buy bonds anticipating a further run up ahead, but the auction results “seem to be put [those fears] to rest for now,” Jefferies (NYSE:JEF) said.
Semiconductors rose more than 4% adding to gains in the broader tech sector as investors appeared to take advantage of the recent beatdown in chip stocks.
But it wasn’t all green in tech as Oracle (NYSE:ORCL) fell 6% after its softer guidance offset better-than-expected fourth-quarter results.
During the recent melt-up in rates, intense debate broke out over the catalyst that had pushed yields up, with some pinning blame on fears over runway inflation, while others suggested the appreciation was sparked by optimism over the economic recovery.
In recent days, fears that inflation would spiral out of control have eased, and data continues to point to an improving economic recovery.
The U.S. Department of Labor reported Thursday that initial jobless claims decreased by 42,000 to 712,000 in the week ended March 6, the lowest since November and above forecasts for decline to 725,000.
Cyclical stocks – those that move in tandem with economy – climbed higher, though not in the same vein as recent sessions, as financials lagged the broader move higher.
Energy was up more than 1% as oil prices resumed their trend higher following on weakness earlier this week.
Market sentiment on stocks has also been boosted by wave of the liquidity that is set to increase over the next few months as President Biden’s $1.9 trillion was signed into law on Thursday.
In other news, Bumble (NASDAQ:BMBL) reported its maiden quarterly report and guidance on Wednesday that topped Wall Street expectations, sending its shares more than 18% higher.
S&P 500, Dow Hit Records as Tech Flexes Muscles; Biden Signs $1.9tn Stimulus