Twitter, Apple, Netflix lead tech gains
The Nasdaq Composite Index registered its second record close in a row Tuesday on the back of a rally in the shares of technology and internet giants Netflix Inc. and Apple Inc., underscoring a resurgence in the sector that has been among the market’s more influential. However, the Dow lagged as the stocks of slumping financials and consumer-staples weighed on the blue-chip gauge.
The Dow Jones Industrial Average DJIA, +0.67% ended down 13.71 points, or less than 0.1%, to 24,799.98, with component Goldman Sachs Group Inc.GS, +0.78% delivering the stiffest headwind for the price-weighted benchmark as a retreat in government bond yields exacted a toll on banks and other financial companies that benefit from rising rates. Meanwhile, the S&P 500 indexSPX, +0.40% rose 1.92 points, or less than 0.1%, at 2,748.79, with consumer-staples stocks down 0.5% and financials off 0.4%.
The Nasdaq Composite Index COMP, -0.15% advanced 31.40 points, or 0.4%, at 7,637.86, marking a second record close and the third consecutive advance for the tech-laden equity gauge. The index marked an intrasession record at 7,644.48, marking its first such record since March 13, according to FactSet data.
The small-cap-oriented Russell 2000 index RUT, +0.18% also logged a record at 1,664.63, ending near an all-time intraday top at 1,664.69 set earlier on Tuesday.
The market’s gains were fueled by the technology sector, given the advance for the Nasdaq, driven by some of the group’s largest and most dominant companies, including Apple Inc., which saw its shares score back-to-back records amid optimism over the iPhone maker’s outlook following details from its software-focused Worldwide Developers Conference. A rise for Twitter Inc. shares, which were expected to be included in the S&P 500 index, further underscored bullish sentiment for the technology and internet segment.
Tuesday’s modest gains also come as Wall Street looks to regroup after recent upheaval triggered by political turmoil in Italy. Newly installed Prime Minister Giuseppe Conte on Tuesday won a vote of confidence in parliament but ushered in a fresh wave of angst in his maiden speech, underlining his antiestablishment party’s hopes to cut corporate and individual taxes, putting the government at odds with other members of the eurozone.
Still, investors appeared to put trade tensions aside, even as trade talks have frayed between the U.S. and China. But leaders of the Group of Seven nations will hold talks in Canada on Friday and Saturday, where tariffs and trade are likely to be discussed. Last weekend’s rebuke by G-7 finance ministers of the Trump administration’s trade tariffs could add some stress to the gathering.
“The fact of the matter is that investors are realizing that the tech sector is the sector they can count on for solid earnings growth,” said Lindsey Bell, investment strategist at CFRA. Bell said that since the second quarter, earnings-per-share growth for the S&P 500’s tech sector has come in about 7 percentage points better that the broader market, on average.
“Our view is that the current economic expansion and bull market has room to run and we aren’t looking at the prospect of a recession starting until 2020 at the earliest,” said Albert Brenner, director of asset allocation strategy at People’s United Advisors.
Shares of Apple Inc. AAPL, -0.16% rose 0.8%, marking a fresh record as the Cupertino, Calif.-based tech giant announced new augmented-reality development tools and software upgrades for all its products, along with a new Apple Watch at the company’s developers’ conference.
Shares of Allergen PLC AGN, +0.32% rose 0.7% as activist investors Appaloosa and hedge fund Senator Investment Group requested that the drug company either split the office of chief executive and chairman or get a new, outside chairman or CEO.
Shares of Netflix NFLX, -0.34% booked a third straight all-time high amid the rally in internet and tech-related names.
The Markit services purchasing managers index for the U.S. in May rose to 56.8 from 54.6.
The Institute for Supply Management services index rose to 58.6 in May from 56.8, while a reading of job openings rose to a fresh record in April, reaching 6.7 million after 6.63 million in March, the Labor Department said Tuesday.
U.S. traded crude-oil futures US:CLN8 settled higher, snapping a three-session skid. Gold GCQ8, -0.02% ended slightly higher, up 0.4% at $1,302.20 an ounce, while the ICE U.S. Dollar Index DXY, -0.16% was lower at 93.834, as the euro rallied on hopes of the end of quantitative-easing programs by the European Central Bank.