Tech drives stocks to new heights on Wall Street after choppy start

Big technology companies powered stocks higher on Wall Street on Monday, adding to the market’s gains after a three-week winning streak.

The S&P 500 rose 0.8% after being down 0.3% in the early going. Gains by technology and communication stocks and companies that rely on consumer spending outweighed losses elsewhere in the market. The rally, which gained strength in the final hour of trading, nudged the benchmark S&P 500 index to a slight gain for the year and drove the Nasdaq composite to an all-time high.

Amazon led the way higher in the S&P 500 with a 7.9% gain. Citrix Systems was close behind finishing 7.6% higher. Microsoft also helped lift the market, rising 4.3%. Noble Energy climbed 5.4% after the company agreed to be acquired by Chevron for $5 billion.

Technology and communications stocks and big e-commerce retailers like Amazon have benefited this year as the pandemic has forced people to largely stay home and rely increasingly on the internet for shopping, work and entertainment. Among the losers have been banks, airlines and cruise lines.

“Last week, you had the value trade come back for a few days,” said Tom Martin, senior portfolio manager with Globalt Investments. “The pattern seems to be that most days lately have been favoring growth over value.”

The S&P 500 gained 27.11 points to 3,251.84. The Dow Jones industrial average, which was down for most of the day, added 8.92 points, or less than 0.1%, to 26,680.87.

The Nasdaq had its best day since the end of April. It climbed 263.90 points, or 2.5%, to 10,767.09. The Russell 2000 index of small company stocks gave up 5.36 points, or 0.4%, to 1,467.95.

Treasury yields were mixed, reflecting caution among investors. European markets closed mostly higher and Asian markets ended mixed.

Wall Street is coming off its third straight weekly gain following improvements in hiring, retail sales and other parts of the economy, along with rising hopes for a COVID-19 vaccine. Underlying it all is massive aid for the economy and the promise of nearly zero interest rates from the Federal Reserve. The overall S&P 500 index has rallied back to within 4% of its record set in February and is back to where it was in early June.

Still, worries remain that the rise of coronavirus counts across much of the country will derail efforts to reopen businesses shut down due to the pandemic.

“Until we have more clarity around all these different issues, it wouldn’t surprise us if the market ended the year right where we are today,” said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute.

Investors have an eye on Washington as Congress returns this week to begin work with the White House on another trillion-dollar economic relief package against the backdrop a renewed surge in the outbreak. The U.S. has now registered more coronavirus infections and a higher death count of 140,500 than any other country.

The Fed’s efforts to support markets and expectations that Washington will deliver more financial aid to help Americans weather the economic downturn has been key in keeping markets mostly pushing higher since stocks plunged in March.

“If markets are allowed to trade in a vacuum without policy, you could see much more volatility,” Samana said.

Traders were also looking ahead to a busy week of earnings reports from major U.S. companies, including Coca-Cola and Microsoft.

Expectations are low for companies’ performance in the April-June quarter due to the pandemic, given the economic fallout from the broad business shutdowns and the rapid increase in unemployment as millions of Americans were laid off or furloughed. But investors want to hear what company CEOs have to say about how they expect their businesses to fare in the second half of this year and in 2021.

“The question is what are the early indications of the third quarter shaping up like?” Martin said.

The yield on the 10-year Treasury slipped to 0.61% from 0.63% late Friday.

In the commodities markets, the price of benchmark U.S oil for August delivery reversed an early slide, gaining 22 cents to settle at $40.81 a barrel. Brent crude oil for September delivery rose 14 cents to $43.28 a barrel.