Make Kitco Your Homepage

Tech stocks lead Wall Street higher as Fed meeting begins

Kitco News

(Reuters) - Tech stocks pushed Wall Street’s main indexes higher on Tuesday as positive U.S. factory data fueled optimism around an economic rebound, while investors looked for continued support from the Federal Reserve as its two-day meeting got underway.

The tech index .SPLRCT jumped 0.9% as it continued to recover from a brutal sell-off earlier this month that knocked the S&P 500 and Nasdaq off their all-time highs.

Apple Inc AAPL.O rose 0.6% ahead of a virtual product launch, where it is expected to unveil updated watches and iPads, but no iPhones.

“The technology stocks in many ways have become the new defensive stocks ... in a world of extremely low interest rates these stocks have offered good returns,” said Anik Sen, global head of equities at PineBridge Investments.

“The most visible growth becomes a safe haven in many ways.”

In its first policy meeting since Fed Chair Jerome Powell announced a more accommodative stance on inflation, the central bank could switch its Treasury purchases toward more long-dated debt to keep long-term yields low, some strategists said.

Expectations from the Fed have increased amid a stalemate in talks for fiscal relief and economic reports suggesting an uneven recovery from the coronavirus-induced recession.

Data on Tuesday showed U.S. factory output increased strongly in August. Separately, U.S. import prices increased more than expected for the same month, supporting the view that inflation pressures were building up.

Earlier in the day data showed China’s industrial output accelerated the most in eight months in August.

At 10:43 a.m. ET, the Dow Jones Industrial Average .DJI was up 125.47 points, or 0.45%, at 28,118.80, the S&P 500 .SPX was up 23.72 points, or 0.70%, at 3,407.26. The Nasdaq Composite .IXIC was up 104.07 points, or 0.94%, at 11,160.72.

Tesla Inc TSLA.O jumped 4.2%, rising for the fifth day, as anticipation heats up for its "Battery Day" event next week, where Chief Executive Officer Elon Musk is expected to tout the latest improvements in the electric-car maker's battery technology.

Carnival Corp CCL.N slid 8.8% after it warned of a quarterly loss of $2.9 billion, as the COVID-19 pandemic brought the cruise industry to a virtual standstill.

Citigroup Inc C.N dropped 3.5% following a report that federal regulators were preparing to reprimand the U.S. lender for failing to improve its risk-management systems.

Advancing issues outnumbered decliners for a 2.01-to-1 ratio on the NYSE and a 1.75-to-1 ratio on the Nasdaq.

The S&P index recorded 16 new 52-week highs and no new low, while the Nasdaq recorded 53 new highs and nine new lows.

Reporting by Medha Singh and Devik Jain in Bengaluru; Editing by Shounak Dasgupta

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.