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S&P, Nasdaq end at record highs as dovish Fed taper-talk calms investors

Reuters2021-08-31

S&P 500 tracks longest monthly winning streak since 2018.

S&P 500, Nasdaq end at fresh record highs

PayPal gains on report it is exploring a stock-trading platform

Aug 30 (Reuters) - The S&P 500 and Nasdaq ended Monday at fresh record highs as investors jumped into technology stocks, taking comfort from the Federal Reserve's dovish comments on tapering in monetary stimulus and what that might mean for the economic recovery.

Apple Inc jumped to an all-time high, while Microsoft Corp , Amazon.com , Google-owner Alphabet Inc all rose, helping the tech-heavy Nasdaq outperform the S&P 500 and the Dow.

High-growth tech stocks tend to benefit from expectations of lower rates because their value rests heavily on future earnings.

The benchmark index is tracking its longest monthly winning streak since 2018 on the promise of easy money, with investors shrugging off signs of a slowing economic recovery and surging COVID-19 cases.

Fed Chair Jerome Powell said on Friday the central bank would continue to be cautious in its approach to tapering its massive pandemic-era stimulus, while reaffirming a steady economic recovery.

"It's now clear that there's going to still be an extraordinary amount of support for this economy, probably until November," said Ed Moya, senior market analyst for the Americas at OANDA.

"Some investors are thinking that tapering might not even start this year, but the one thing that everyone can agree on is that Chair Powell has signaled they are in no rush to raise interest rates and he's disconnected tapering with rate-hike timing."

The S&P 500 has risen more than 3% so far in August - a seasonally weak period for stocks - and Wells Fargo analysts said last week they expect the index to rise another 8% by the end of the year.

It is also on track to log one of its best year-to-date returns through August of the past six decades, said Chris Larkin, managing director of trading at E*Trade Financial.

Unofficially, the Dow Jones Industrial Average fell 55.96 points, or 0.16%, to 35,399.84, the S&P 500 gained 19.39 points, or 0.43%, to 4,528.76 and the Nasdaq Composite added 136.22 points, or 0.9%, to 15,265.72.

While U.S. crude prices rose 0.7% on Monday, energy stocks broadly slipped as investors fretted about possible longer-term impacts to offshore oil production and damage to energy infrastructure from Hurricane Ida, which roared ashore on Sunday near Port Fourchon, Louisiana, a major hub for the U.S. offshore oil industry.

Falling bond yields also pressured bank stocks, with the S&P 500 banking index ending down.

PayPal Holdings Inc advanced on a CNBC report that the financial services firm was exploring the development of a stocks trading platform for its U.S. customers. The news helped push Robinhood Markets Inc down.

U.S.-listed shares of Chinese gaming firm NetEase Inc slumped as Chinese regulators slashed the amount of time players under the age of 18 can spend on online games to an hour on Fridays, weekends and holidays.

(Reporting by Shashank Nayar in Bengaluru and David French in New York; Editing by Arun Koyyur and Lisa Shumaker)

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  • TheRainmaker
    ·2021-09-01
    Ok
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    ·2021-08-31
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    ·2021-08-31
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