Nasdaq jumps as technology stocks back in favor

(Reuters) – Wall Street’s main indexes advanced on Wednesday as signs of a working COVID-19 vaccine raised hopes of a faster-than-expected economic rebound, with technology stocks bouncing back from steep losses this week as coronavirus cases spiraled.

The U.S. flag covers the front facade of the New York Stock Exchange (NYSE) in New York City, New York, U.S., November 9, 2020. REUTERS/Brendan McDermid/Files

The tech-heavy Nasdaq .IXIC advanced 1.9%, while mega-caps Netflix Inc NFLX.O, Amazon.com Inc AMZN.O and Apple Inc AAPL.O, the so-called stay-at-home winners, also gained between 1.3% and 2.7%.

The tech index .SPLRCT climbed 2.4%, the most among major S&P sectors, followed by the consumer discretionary index .SPLRCD.

The S&P growth stock index .IGX outperformed the value index .IGX, which includes banks and energy stocks, in a reversal of Tuesday’s trend.

Encouraging data from a late-stage vaccine earlier this week prompted a rotation away from technology names, and lifted demand for stocks sensitive to economic outlook, as well as value stocks including industrials .SPLRCI and healthcare .SPXHC that have lagged broader market.

“We will see this tug of war between the virus and the vaccine and between growth and cyclicals for months, until there’s a more definitive timeline for mass distribution of the vaccine,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

Meanwhile, the top U.S. infectious disease specialist urged caution until a vaccine can be approved and distributed, as California and several states across the U.S. Midwest tightened restrictions.

Markets, which also got a boost after Democrat Joe Biden was projected the winner of the U.S. election, have shrugged off legal challenges from President Donald Trump as no evidence of problems with votes have been produced.

The Democratic Party retained control of the U.S. House of Representatives with a lower majority, the Associated Press reported, but investors are more focused on Senate races in January that could determine if major Democratic priorities such as a large coronavirus aid bill would be passed.

At 12:39 p.m. ET, the Dow Jones Industrial Average .DJI rose 75.31 points or 0.26% to 29,496.23, the S&P 500 .SPX gained 31.01 points or 0.88% to 3,576.56 and the Nasdaq Composite .IXIC gained 217.40 points or 1.88% to 11,771.25.

Lyft Inc LYFT.O jumped 2.7% after the ride-hailing app said it was working on a new service to take a slice of the burgeoning food-delivery market, as it works to make up for a drop in quarterly revenue.

The Philadelphia SE chip index .SOX rose about 3.4% after suffering sharp losses a day earlier.

Advancing issues matched decliners on the NYSE and favored advancers for 1.1-to-1 on the Nasdaq.

The S&P 500 posted six new 52-week highs and no new low, while the Nasdaq Composite recorded 79 new highs and six new lows.

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