Tech stocks helped lead Wall Street higher on Thursday, boosting the Nasdaq index into positive territory for the year, even as falling US Treasury yields indicated the depth of concern about the economy.
The Nasdaq closed up 1.4% on Thursday, taking it back to its level at the start of the year and underlining how the resilience of the technology sector, in particular, has helped equity markets claw back a lot of their COVID19—related losses.
The Dow rose 211.25 points, or 0.89%, to 23,875.89, the S&P 500 added 32.77 points, or 1.15%, to 2,881.19 and the Nasdaq Composite .IXIC added 125.27 points, or 1.41%, to 8,979.66.
The Nasdaq turned marginally positive for 2020 by closing above 8,972.604, after being down well over 20% for the year as of late March. The S&P 500 remains down over 10% this year.
Importantly though the Nasdaq has little exposure to oil which has allowed it to escape the pressures from the collapse in global prices.
It has been tech giants like Microsoft (up 16.9% year to date), Amazon (up 28%) and Netflix (up 35%) and to a lesser extent Facebook (up 2.9%), Alphabet (up 2.6%) and Apple Up 3.4%) that has helped the index rebound more strongly.
The gains by Apple, Facebook, and Alphabet (Google) have been smaller because the trio depend more on consumer spending and interest, especially through ad dollars which have slumped in the past three months.
Apple is really as much a retailer as tech giant and its worldwide stores have been closed for the past month or more in some locations.
Nor have these giants – especially the big three – been damaged by the economic slump which will be underlined by the terrible April unemployment figures tonight.
Reflecting those concerns overnight yields on US 10 year bonds dipped to 0.637%, down from more than 0.71% at the start of this week and a sign the bond markets are wary about the state of the economy and the enormous, near $US3 trillion borrowing campaign that’s the US Treasury is about to kick off.
Thursday’s 1.41% Nasdaq gain was fuelled by a 14% leap in PayPal Holdings after the payments processor delivered an upbeat outlook as the health crisis drives more people to shop online. PayPal shares are up 35% so far this year.
The Nasdaq’s recent strong performance leaves it down about 8% from its February record high, just before fears of the coronavirus put an end to an 11-year bull market.
By comparison, the S&P 500 remains down 14% from its record high, and the Dow is down 19% from its peak.
This had little impact on the ASX overnight futures market.
It was up 3 points at 6.30 am, after being down slightly an hour earlier.
That was after the 20 point, 0.38% loss yesterday for the ASX 200 which ended a weak day at 5,364.2.