The US markets sprung to life with the rapid rise of tech stocks boosting the Dow and S&P 500 to record highs at close.
The Dow clambered 144.71 points to 21,528.99 a record high. It closed out last week at 21,384.42 and opened on Monday morning at 21,444.75. The S&P 500 also closed just slightly off its day high at a record 2,453.46 up +0.83%.
Tech-heavy Nasdaq did a turnaround reversing last week's losses. It went up 87.25 points or +1.42% to 6,239.01. Amazon once again breached its $1,000 mark at open but closed just off the high +0.76% at $995.17.
Among market movers with an upward trajectory were Apple +2.86, health tech and electronic tech companies also made big gains with Advanced Micro Devices up +4.28% and PerkinElmer +6.54%.
- Dow 21,528.99 +0.68%
- S&P 500 2,453.46 +0.83%
- Nasdaq 6,239.01 +1.42%
- Russell 2000 1,418.73 +0.81%
- NYSE Composite 11,833.34 +0.52%
- Gold 1,245.80 -0.07%
- Oil WTI $44.13 -0.16%
10-Year Yield 2.19% +0.03
Nature of the 'tech' beast
The sentiment from market commentators is that a buoyant tech sector is about strong earnings growth and the innovation inherent to the sector from digital transformation through to virtual reality.
It's also true that the upward swing may be bargain-hunting investors seeking value after last week's sell off. Technology is the stock market's best performing sector. The S&P 500 technology index has risen close to 20% this year.
Deals such as Yahoo! and Verizon and Amazon's purchase of Whole Foods could spur some investor excitement, who view these deals as harbingers of others to come.
The premiums demanded from tech stock is because of the high growth rate. However, valuation remains a concern as experts consider them stretched and any snap back can be painful for those buying at or near peak.
Hawks not doves
President and CEO of Federal Reserve Bank of New York, William Dudley, gave a rosy assessment of the US economy and was sanguine about the latest report showing slowing inflation.
According to the Wall Street Journal, Dudley said he was "very confident" that there is a long ways to go" in the economic expansion. This suggests that another rate hike remains on the cards.
In fact, market experts expect Dudley and Fed Reserve chair, Janet Yellen, to have been more dovish. However, Yellen stood firm in spite of soft data about inflation and raised interest rates last week.
Yields rise as bond prices fall. The yield on the 10-year Treasury note remains low at 2.19%. Gold also fell to a low of $1,245.