Nasdaq jumps as tech stocks back in favor

(Reuters) – Wall Street’s main indexes advanced on Wednesday as signs of a working COVID-19 vaccine raised hopes of a faster-than-expected economic rebound, with technology stocks bouncing back from steep losses this week.

The U.S. flag covers the front facade of the New York Stock Exchange (NYSE) in New York City, New York, U.S., November 9, 2020. REUTERS/Brendan McDermid/Files

The tech-skewed Nasdaq advanced 1.3%, while mega-caps Netflix Inc, Amazon.com Inc and Apple Inc, the so-called stay-at-home winners, also gained between 1.7% and 2.5%.

The tech index climbed 1.8%, the most among major S&P sectors, followed by the consumer discretionary index.

The S&P’s growth stock index outperformed the value index, which includes banks and energy stocks, in a reversal of Tuesday’s trend.

Encouraging data from a late-stage vaccine earlier this week prompted a rotation away from technology names, and lifted demand for stocks sensitive to economic outlook, as well as value stocks that have lagged broader market.

“With the sell-off over the last couple of days, price became more attractive for growth-oriented investors and also the realization set in that the vaccine isn’t going to solve near-term COVID issues here in the U.S.,” said Rick Meckler, partner, Cherry Lane Investments, a family investment office in New Vernon, New Jersey.

The top U.S. infectious disease specialist urged caution until a vaccine can be approved and distributed, as California and several states across the U.S. Midwest tightened restrictions.

Markets, which also got a boost after Democrat Joe Biden was projected the winner of the U.S. election, have broadly shrugged off legal challenges from President Donald Trump as they have not produced evidence of problems with votes.

Meanwhile, the Democratic Party retained control of the U.S. House of Representatives with a lower majority, the Associated Press reported, but investors are more focused on Senate races in January that could determine if major Democratic priorities such as a large coronavirus aid bill would be passed.

At 11:07 a.m. ET the Dow Jones Industrial Average rose 32.54 points, or 0.11%, to 29,453.46, the S&P 500 gained 20.02 points, or 0.56%, to 3,565.55 and the Nasdaq Composite gained 149.45 points, or 1.27%, to 11,700.87.

Lyft Inc jumped 5% after the ride-hailing app said it was working on a new service to take a slice of the burgeoning food-delivery market, as it works to make up for a drop in quarterly revenue.

The Philadelphia SE chip index rose about 1.6% after suffering sharp losses a day earlier.

Advancing issues matched decliners on the NYSE and on the Nasdaq.

The S&P 500 posted six new 52-week highs and no new low, while the Nasdaq Composite recorded 68 new highs and five new lows.

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