U.S. Stocks Boosted by Recovering Technology Shares

Markets turn their focus to Fed, which begins its two-day interest-rate-setting meeting Tuesday


Updated June 13, 2017 12:01 p.m. ET

A recovery in the shares of technology companies helped lift U.S. stock indexes Tuesday.

The Dow Jones Industrial Average added 70 points, or 0.3%, to 21307. The S&P 500 gained 0.3%, and the tech-heavy Nasdaq Composite, which had posted its worst two-day decline since September on Monday, rose 0.5%.

Shares of companies that had slid in



From Market Watch

U.S. stocks rose on Tuesday, with the Dow hitting an intraday record as technology shares rebounded after a two-day decline. Still, investors were looking ahead to the start of a closely watched Federal Reserve meeting that could offer clues about the central bank’s monetary-policy plan.

The Dow Jones Industrial Average DJIA, +0.39% rose 58 points, or 0.3%, to 21,294, briefly climbing to 21,307.40, an all-time high intraday. The S&P 500 SPX, +0.38%added 5.3 points to 2,435, a gain of 0.2%. The Nasdaq Composite IndexCOMP, +0.67%  rose 0.5% to 6,204, a gain of 0.5%.

Tech shares fell sharply on Friday and Monday, weighing on broader indexes, particularly in the Nasdaq, which has a higher concentration of tech names. Despite that, major indexes have been in a pronounced uptrend of late; the S&P is less than 0.5% away from its own record, while the Nasdaq is about 2% below its own all-time high.

Read: Don’t panic—this shows tech stocks’ slide may well be a buying opportunity

And see: What sparked the Nasdaq’s worst two-session, tech-fueled rout in 9 months

The tech selloff didn’t spread to other sectors in a notable way. Instead, it was countered by a move into the energy and financial sectors, which Chris Weston, chief market strategist at IG, said could potentially offer better returns.

Weston doesn’t really think the 10% decline “that many had been talking about on Friday,” will come to pass, he said in a note to clients.

Fed meeting kicks off: Investors are turning their attention to the two-day Federal Open Market Committee meeting that wraps up Wednesday with a news conference with Fed Chairwoman Janet Yellen.

Market observers are nearly unanimous in the view that the fed-funds rate will be lifted, with a nearly 100% chance of an interest-rate increase, according to the CME Group.

Investors will scrutinize the Fed’s words to glean the pace of rate increases in the coming months.

The Fed “has been confronted recently with softer inflation data and only scattered evidence of an expected reacceleration of activity,” David Joy, chief market strategist at Ameriprise Financial wrote in a note to clients. “While few expect the Fed to refrain from acting this time, what it must say about upcoming meetings and the possible timing of the start of unwinding its balance sheet will be scrutinized.”

Also of interest for investors will be Attorney General Jeff Session, who will testify before the Senate Intelligence Committee on Tuesday and is expected to be questioned as part of the panel’s investigation into Russian efforts to interfere in last year’s election. The Justice Department’s Russia probe is seen as a potential headwind for the market, as any protracted controversy involving President Donald Trump could reduce the odds that his economic agenda gets passed, which analysts say is necessary to justify current valuations.

Check out: Here’s what the Fed will signal when it hikes interest rates

Economic data: The National Federation of Independent Business reported small-business sentiment was steady in May. Separately, the producer-price index was flat last month following a sharp 0.5% increase in April, as had been expected.

Stock movers: In the tech space, shares of Facebook Inc. FB, +1.81%  added 1.3% while Google parent Alphabet Inc. GOOGL, +1.01%  was up 0.7%. Separately, Amazon.com Inc. AMZN, +1.39% was up 1% on the day.

Eli Lilly & Co. LLY, -0.43%  dipped 0.7%, erasing a premarket gain that came after the company said its pain drug with Pfizer Inc. PFE, +0.08%  had received fast track designation from the Food and Drug Administration.

Cheesecake Factory Inc. CAKE, -9.65%  shares fell 9.2% after the company cut its second-quarter outlook.

Other markets: European stocks SXXP, +0.55%  were firmer across the board, lifted by rises for tech stocks. Asian markets ADOW, +0.23%  shook off Wall Street’s woes and posted gains.

The dollar DXY, -0.12%  fell 0.1%, chiefly against the British poundGBPUSD, +0.6951% which rose after a bigger-than-expected gain in U.K. inflation and following weakness that followed a recent election in the company. Oil pricesCLQ7, +0.54%  shifted lower, and gold prices GCQ7, -0.23%  pulled back.



US STOCKS-Dow hits record high as banks gain, tech recovers



* Fed to begin two-day meeting on Tuesday
    * Apple top stock on S&P, Nasdaq
    * Banks rise on Treasury Dept's deregulation plan
    * Indexes up: Dow 0.26 pct, S&P 0.31 pct, Nasdaq 0.77 pct

 (Updates to open)
    By Sruthi ShankarJune 13 (Reuters) - The Dow Jones Industrial Average hit a
record intraday high as bank stocks rose ahead of a highly
anticipated interest rate hike and as technology stocks
    Traders have priced in a 94 percent chance of the Federal
Reserve raising interest rates. Investors are also looking for
more details on the central bank's plans to trim its $4.5
trillion balance sheet.
    The Fed is expected to release its decision at 2:00 p.m. ET
(1800 GMT) on Wednesday followed by a press conference by Fed
Chair Janet Yellen.
    A bout of profit-taking in richly-valued technology stocks
caused the Nasdaq to suffer its worst two-day drop in more than
six months on Monday.
    However, technology stocks staged a recovery on Tuesday.
Apple <AAPL.O>, which had sparked the selloff, was up 1.3
percent at $147.29 and boosted the S&P 500 and the Nasdaq.
    Big technology names like Microsoft <MSFT.O>, Alphabet
<GOOGL.O> and Facebook <FB.O> were also up about 1 percent,
propping up the S&P technology sector <.SPLRCT>.
     "It (the market) wants to wait and see if the Fed's going
to actually raise rates tomorrow, and then it wants to wait and
see whether or not the tech stocks can actually rebound," said
Adam Sarhan, chief executive officer at 50 Park Investments in
    "If (the rebound) holds and the Fed does raise rates
tomorrow, it would bode very well for bulls."
    At 9:49 a.m. ET the Dow Jones Industrial Average <.DJI> was
up 54.38 points, or 0.26 percent, at 21,290.05, the S&P 500
<.SPX> was up 7.57 points, or 0.31 percent, at 2,436.96 and the
Nasdaq Composite <.IXIC> was up 47.48 points, or 0.77 percent,
at 6,222.95.
    Six of the 11 major S&P 500 sectors were higher. Financials
<.SPSY> were up 0.6 percent, helped by gains in big banks after
the U.S. Treasury Department announced sweeping changes to
banking regulations on Monday.
    The department proposed to reduce trading restrictions that
big banks face, ease their annual stress tests, and curb the
powers of the Consumer Financial Protection Bureau (CFPB).
    Shares of Bank of America <BAC.N>, Wells Fargo <WFC.N> and
JPMorgan <JPM.N> were up about 1 percent. Goldman Sachs <GS.N>
1.5 percent gain was the driver behind the Dow's record intraday
    Restaurant chain operator Cheesecake Factory <CAKE.O> was
down 8.8 percent at $53.30 after it warned of a decline in
comparable store sales in the current quarter.
    Tesla <TSLA.O> was up 3 percent at $369.80 after Berenberg
raised its rating on the stock to "buy" from "hold".
    Advancing issues outnumbered decliners on the NYSE by 1,519
to 1,080. On the Nasdaq, 1,545 issues rose and 839 fell.
    The S&P 500 index showed 28 new 52-week highs and 11 new
lows, while the Nasdaq recorded 82 new highs and 70 new lows.

 (Reporting by Sruthi Shankar in Bengaluru; Editing by Anil
 ((sruthi.shankar@thomsonreuters.com; within U.S. +1 646 223
8780; outside U.S. +91 80 6749 6328; Reuters Messaging:

Keywords: USA STOCKS/ (UPDATE 2)

Read more: http://www.nasdaq.com/article/us-stocksdow-hits-record-high-as-banks-gain-tech-recovers-20170613-00779#ixzz4ju1VjifF


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