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Wall Street rises on tech rebound; Tesla gains

By Herbert Lash

wall street, market, stocks
Reuters NEW YORK
3 min read Last Updated : Mar 23 2021 | 3:01 AM IST

By Herbert Lash

NEW YORK (Reuters) - U.S. stocks rallied on Monday as technology stocks rebounded from a recent selloff sparked by surging bond yields and Tesla jumped after a fund run by an influential investor in the electric-car maker said its shares could approach $3,000 by 2025.

Tesla Inc's 5.6% gain to $691.46 provided one of the biggest boosts to the S&P 500 and Nasdaq after Ark Invest, founded by star stockpicker Cathie Wood, raised its price target on Friday using 34 inputs.

Growth stocks rose 1.82% while value shares were flat.

A sharp run-up in Treasury yields since mid-February has weighed on high-flying technology stocks that benefit from low yields and led to a rotation into underpriced value stocks from growth stocks that have fueled the past year's rally.

An easing off of 14-month highs in the 10-year U.S. Treasury note's yield after it hit 1.754% last week has allowed tech shares to bounce back, said Tom Hayes, chairman of hedge fund Great Hill Capital LLC in New York.

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"It's going to look like tech and growth is back but I think it will be much more moderate than people think," Hayes said. "There's a plethora of growth, growth across many sectors, and we've seen managers bidding those (shares) up in cyclicals and value. I think that persists over the next 18 months," he said.

The tech-heavy Nasdaq outpaced the S&P 500 and the Dow, which posted all-time highs last week on bets that stimulus and vaccine rollouts would lead to a strong rebound in the U.S. economy.

"The technology stocks are pretty beaten down and it's not shocking to see those rebounding a little bit from their lows," said Jake Wujastyk, chief market analyst and founding member of TrendSpider.

Kansas City Southern surged 12.5% after Canadian Pacific Railway Ltd agreed to acquire the railroad operator in a $25 billion cash-and-stock deal to create the first railway spanning the United States, Mexico and Canada.

At 2:31 p.m. EDT, the Dow Jones Industrial Average rose 148.47 points, or 0.46%, to 32,776.44, the S&P 500 gained 38.84 points, or 0.99%, to 3,951.94 and the Nasdaq Composite added 231.18 points, or 1.75%, to 13,446.42.

Bank stocks, which have enjoyed a rally on brightening economic prospects, dropped almost 2%.

The S&P 500 tech index jumped about 2.35%, while energy and financials were in the red.

The iShares MSCI Turkey ETF sank about 20% as President Tayyip Erdogan's decision to oust a hawkish central bank governor sparked fears of a reversal of recent rate hikes.

Declining issues outnumbered advancing ones on the NYSE by a 1.05-to-1 ratio; on Nasdaq, a 1.10-to-1 ratio favored decliners.

The S&P 500 posted 11 new 52-week highs and no new lows; the Nasdaq Composite recorded 87 new highs and 23 new lows.

 

(Reporting by Herbert Lash in New York; Additional reporting by Medha Singh and Devik Jain in Bengaluru; Editing by Saumyadeb Chakrabarty and Matthew Lewis)

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Topics :Wall StreetTeslaUS stock market

First Published: Mar 23 2021 | 3:00 AM IST

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