US STOCKS-Big Tech raises the S&P 500 to a new record …
* Weekly jobless claims drop as expected
* The micron drops as HS goes to “equal weight”
* Producer prices are increasing at the fastest rate in a decade
* Palantir increases on pace with second quarter revenue, optimistic outlook (updates from US market close)
By Herbert Lash
NEW YORK, Aug. 12 (Reuters) – The Dow Jones and S&P 500 hit record close for a third day in a row Thursday, with mega-cap tech stocks pushing the market higher as investors warmed to data on employment showing a stable economic recovery in the United States.
Apple Inc, Microsoft Corp, Amazon.com, Google’s parent company Alphabet Inc and Facebook Inc, which account for a quarter of the S&P 500 market cap, dominated stocks of the high-tech S&P and Nasdaq.
Tesla Inc, Nvidia Corp and Moderna Inc also advanced on a day when more stocks fell than they advanced.
“Today, the S&P 500 has hit a new all-time high, and is at an all-time high for good reason,” said Terry Sandven, chief equity strategist at US Bank Wealth Management in Minneapolis.
The fundamental backdrop is for the rise in stock prices, Sandven said. Profits tend to rise, interest rates are low and inflation remains subdued, he said.
Unofficially, the Dow Jones Industrial Average rose 14.74 points, or 0.04%, to 35,499.71, the S&P 500 gained 13.12 points, or 0.29%, to 4,460.82 and the Nasdaq Composite added 51.13 points, or 0.35%, to 14,816.26.
According to Tim Ghriskey, chief investment strategist at Inverness Counsel, traders have taken hold of large tech stocks that missed the global market rising last week.
“The big tech shift is just a business opportunity. Big tech has been going down for about a week, underperforming the market quite significantly,” Ghriskey said. “There are bargain hunters coming, who jump on these titles.”
Apple added the most to the S&P, followed by Microsoft, Amazon.com and Tesla. Growth stocks outperformed value stocks, reversing a recent trend.
Health and tech were the top performing sectors in the S&P 500. Energy weighed the most and pulled the Dow Jones up from the record highs it set on Wednesday as an infrastructure bill by several billion dollars was going through Congress.
Data on Thursday showed that U.S. producer prices posted their largest annual increase in more than a decade last month, raising concerns about inflation, after the U.S. consumer price index Wednesday said the pace appeared to be slowing.
The data reflects well-known supply chain challenges that will not change Federal Reserve policy, said Mike Loewengart, managing director of investment strategy at E * TRADE Financial.
“Everyone expects the potential reduction to start in September,” he said. “But for the most part, that wouldn’t change the enabling environment we find ourselves in now, for further gains in the stock markets.”
Trading volume has collapsed, which is typical of August, as the second quarter earnings season draws to a close. Investors are now waiting for the Fed’s annual meeting in Jackson Hole, Wyoming, at the end of the month for clues about its plans to tighten policy.
Micron Technology was one of the biggest weightings in the S&P 500 after Morgan Stanley lowered the stock to “on par.”
In earnings-related moves, US shares of Baidu Inc fell even after the company posted bullish quarterly earnings.
Palantir Technologies Inc surged after the US data analytics firm forecast third-quarter sales to exceed expectations.
Profit reports from Walt Disney Co, vacation home rental company Airbnb Inc and food delivery company DoorDash Inc were due later today.
(Reporting by Herbert Lash, additional reporting by Devik Jain in Bengaluru; Editing by Aditya Soni, Maju Samuel and Dan Grebler)
Our Standards: Thomson Reuters Trust Principles.