US stocks advance towards record with rally in big tech

Bloomberg

US stocks climbed toward an all-time high as a rally in technology companies tempered a slide in banks. Treasuries rose.
The S&P 500 took aim at its February closing record, buoyed fresh Chinese stimulus overnight. The index twice popped above the high last week before fading. The Nasdaq 100 outperformed as a jump in Tesla Inc. and Nvidia Corp. as well as strong results from online retailer JD.com Inc. powered gains in tech shares. Big banks slid after Warren Buffett’s Berkshire Hathaway Inc. pared stakes in many of the industry’s top names. Boeing Co. weighed on the Dow Jones Industrial Average.
The relentless rally in stocks pushed S&P 500 up more than 50% from its March lows amid large stimulus injections and better-than-expected economic and earnings data. Goldman Sachs Group Inc.’s David Kostin boosted his year-end price target for the gauge to 3,600 from 3,000, citing the firm’s above-consensus US growth expectations keyed off positive news on the vaccine front. He joined the likes of Yardeni Research founder Ed Yardeni and RBC Capital Markets’ Lori Calvasina who’ve raised their forecasts in recent weeks.
A gauge of builder sentiment jumped to 78, a six-point gain from July that pushed it to the highest since 1998, according to the National Association of Home Builders/Wells Fargo Market Index. The August number was better than the median analyst estimate of 74 and matched an all-time record in 35 years of the survey.
Yet chances for a deal in Congress on a new, comprehensive stimulus package before September diminish with each passing day, with Democrats and Republicans focused on their party presidential nominating conventions this week and next. Meanwhile, the almost daily drumbeat of tensions between the US and China shows little sign of letting up, while touching on everything from the coronavirus to trade to defense issues to monetary policy.
“Don’t bet against this bull market just yet,” Ryan Detrick, chief market strategist at LPL Financial LLC, said in a blog post about US stocks. This year marked the 10th time that the S&P 500 peaked with a 100-day gain of more than 25% since the index debuted in 1957, according to data compiled by Bloomberg. After the earlier highs, the S&P 500 rose an average of 8.8% in the next 12 months. The index advanced all but once, in 1987-88.
The S&P 500 increased 0.3% as of 10:05 am New York time and the Stoxx Europe 600 Index climbed 0.3%. The MSCI Asia Pacific Index advanced 0.1%.
While the Bloomberg Dollar Spot Index decreased 0.2%, the euro advanced 0.1% to $1.1859 and the Japanese yen appreciated 0.4% to 106.17 per dollar.
The yield on 10-year Treasuries decreased three basis points to 0.68% and Germany’s 10-year yield declined two basis points to -0.44%. Britain’s 10-year yield declined two basis points to 0.226%.
The Bloomberg Commodity Index climbed 1.2% and West Texas Intermediate crude was unchanged at $42.01 a barrel. Gold increased 1.4% to $1,976.70 an ounce.