By Caroline Valetkevitch
Aug 11 – The S&P 500 was higher on Tuesday afternoon and within striking distance of its closing record from February, before the onset of the coronavirus crisis that caused one of Wall Street’s most dramatic crashes in history.
The benchmark index was less than 1% away from the all-time closing high it hit on Feb. 19, when investors started dumping shares in anticipation of what proved to be the biggest slump in the U.S. economy since the Great Depression.
Ultra-low interest rates, trillions of dollars in stimulus and, more recently, a better-than-feared second-quarter earnings season have allowed all three of Wall Street’s main indexes to recover.
The tech-heavy Nasdaq has led the charge, boosted by “stay-at-home winners” Amazon.com Inc, Netflix Inc and Apple Inc.
The Nasdaq was down on Tuesday, however, and investors continued to rotate out of the technology-related market heavyweights and into value shares.
“We’re seeing profit-taking in the mega-cap tech names and seeing those profits allocated toward sectors that have been lagging,” said Quincy Krosby, chief market strategist at Prudential Financial, which is based in Newark, New Jersey.
“We’re seeing a broadening of the market in terms of sectors … This is important because it suggests health in the economy.”
The Dow surged, also coming closer to its February peak.
On Tuesday, the Russell 1000 value index rose 0.9%, while the Russell 1000 growth index was down 0.4%.
Investors are hoping Republicans and Democrats will resolve their differences and agree on another relief program to support about 30 million unemployed Americans, as the battle with the virus outbreak was far from over with U.S. cases surpassing 5 million last week.
The Dow Jones Industrial Average rose 204.79 points, or 0.74%, to 27,996.23, the S&P 500 gained 6.73 points, or 0.20%, to 3,367.2 and the Nasdaq Composite dropped 55.10 points, or 0.5%, to 10,913.26.
Financials and industrials, which have lagged the benchmark index this year, were up on Tuesday as the S&P 500 eyed its longest streak of gains since April 2019.
Aiding sentiment, President Vladimir Putin claimed Russia had become the first country in the world to grant regulatory approval to a COVID-19 vaccine. But the approval has concerned some experts as the vaccine still must complete final trials.
Airlines and cruise operators, which would benefit from a full reopening of the economy, traded higher.
Advancing issues outnumbered declining ones on the NYSE by a 1.91-to-1 ratio; on Nasdaq, a 1.27-to-1 ratio favored advancers.
The S&P 500 posted 45 new 52-week highs and no new lows; the Nasdaq Composite recorded 91 new highs and 10 new lows. (Additional reporting by Medha Singh and Ambar Warrick in Bengaluru; Editing by Shounak Dasgupta, Anil D’Silva and Tom Brown)