Wall Street’s main indexes rose on Monday as technology stocks rebounded from a recent pullback that was sparked by a surge in bond yields, while Tesla shares surged after Cathie Wood’s Ark Invest set a three-year price target of $3,000.
Heavyweight Tesla Inc’s 5% jump to $690 provided the biggest boost to the S&P 500 and Nasdaq. The high-flying $26.6 billion ARK Innovation ETF counts Tesla as its largest holding.
A sharp run-up in Treasury yields since mid-February has dictated the course of equities trading, while weighing on high-flying tech-focused stocks.
“Tech will get a bid if yields moderate and that’ll probably be the theme for the next couple of months,” said Thomas Hayes, chairman at Great Hill Capital in New York.
“Toward the end of the year, value and cyclicals will reemerge, and make new highs once again.”
Russell 2000 Growth, which consists largely of technology stocks, added about 0.7%; while its value counterpart, which focuses on economy-linked financial and energy stocks, dropped about 0.3%.
The Nasdaq climbed about 0.8% to start the week as the benchmark 10-year Treasury yield dipped to 1.688% from a near 14-month high. The index is still down more than 6% from its Feb. 12 record close.
The S&P 500 and the Dow, however, clinched all-time highs as early as last week on bets that stimulus and vaccine rollouts would lead to a strong rebound in the U.S. economy.
Kansas City Southern jumped about 17% after Canadian Pacific Railway Ltd agreed to acquire the railroad operator in a $25 billion cash-and-stock deal to create the first railway spanning the United States, Mexico and Canada.
At 09:58 a.m. EDT the Dow Jones Industrial Average rose 44.01 points, or 0.13% , to 32,671.98, the S&P 500 gained 16.37 points, or 0.42 %, to 3,929.47 and the Nasdaq Composite gained 109.31 points, or 0.83 %, to 13,324.54.
Bank stocks, which have enjoyed a rally on brightening economic prospects, dropped about 1%.
The iShares MSCI Turkey ETF sank about 18% as President Tayyip Erdogan’s decision to oust a hawkish central bank governor sparked fears of a reversal of recent rate hikes.
Declining issues outnumbered advancers by a 1.2-to-1 ratio on the NYSE and by a 1-to-1 ratio on the Nasdaq.
The S&P 500 posted seven new 52-week highs and no new lows, while the Nasdaq recorded 76 new highs and 27 new lows.
