While you were sleeping: Tech stocks rebound
By Margreet Dietz
June 20 (BusinessDesk) – Wall Street climbed, pushing both the Dow and the S&P 500 to record highs, amid a recovery in tech stocks including Apple.
Meanwhile, Federal Reserve Bank of New York President William Dudley said he expects the pace of inflation to pick up.
“We’re pretty close to what we think is full employment,” Dudley said in Plattsburgh, New York, according to Bloomberg. “Inflation is a little bit lower than what we would like, but we think if the labour market continues to tighten, wages will gradually pick up, and with that, we’ll see inflation get back to 2 percent.”
“I’m actually very confident that even though the expansion is relatively long in the tooth, we still have quite a long way to go,” Dudley added.
In 3.16pm trading in New York, the Dow Jones Industrial Average climbed 0.6 percent, while the Nasdaq Composite Index rallied 1.2 percent. In 3pm trading, the Standard & Poor’s 500 Index gained 0.7 percent.
Investors piled into tech stocks again, following a recent retreat.
Technology “valuations are not cheap but it doesn't seem to be a deterrent for buyers," Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia, told Reuters. "Investors were temporarily chased from the space but many companies in the sector offer growth which is difficult to find in the market as a whole."
The Dow rose to a record high as gains in shares of Apple and those of Goldman Sachs, recently up 2.6 percent and 2.3 percent respectively, outweighed declines in shares of Travelers and those of Chevron, recently down 1 percent and 0.9 percent respectively.
Shares of Exxon Mobil also slid, down 0.9 percent recently, as energy stocks followed the price of oil lower amid ongoing concern the global glut shows little sign of abating.
“The number of oil rigs continued to rise last week and the market needs to see at what oil price will we not have further rig activation in the US,” Bjarne Schieldrop, chief commodities analyst at SEB AB in Oslo, told Bloomberg. “There seems to be very low conviction in the market that there really will be any inventory drawdown in the second half of the year.”
In Europe, the Stoxx 600 Index ended the day with a 0.9 percent increase from the previous close. The UK’s FTSE 100 Index rose 0.8 percent, France’s CAC40 Index gained 0.9 percent, while Germany’s DAX Index climbed 1.1 percent.
French equities rose after President Emmanuel Macron earned a solid parliamentary victory over the weekend.
"Markets are celebrating the fact the Macron government has been strengthened by this outcome," Vincent Juvyns, global market strategist at JP Morgan Asset Management, told Reuters.
"Planned reforms could enhance the growth potential of the country and reduce the structural deficit, something which would lift French GDP going forward," according to Juvyns.