Tech stocks power Nasdaq to record high

(Reuters) – The Nasdaq Composite hit a record high on Wednesday, with high-growth technology stocks in the lead after weaker-than-expected private payrolls data raised hopes for an extended support from the U.S. central bank.

Technology stocks, which tend to benefit from a low-rate environment, were up 0.7%, while sectors considered as bond-proxies such as utilities rose 1.2%.

Apple jumped 1.9% to hit record highs, while Microsoft, Google, Amazon and Netflix gained 1%.

The ADP report, published ahead of the government’s more comprehensive employment report on Friday, showed U.S. private employers hired far fewer workers than expected in August.

“If we see employment slowing on Friday, the Fed is most likely to not hint at any tapering until jobs are back on track,” said Sam Stovall, chief investment strategist at CFRA.

U.S. Federal Reserve Chair Jerome Powell has suggested that an improving labor market will be a key factor affecting the decision for a tapering of its massive asset purchases.

Wall Street’s main indexes have hit record highs recently, with the benchmark S&P 500 notching a solid 2.9% rise in August as investors shrugged off risks around a rise in new coronavirus infections and hoped for the Fed to remain dovish in its policy stance.

Another set of data showed U.S. manufacturing activity unexpectedly picked up in August amid strong order growth, but a measure of factory employment dropped to a nine-month low, likely as workers remained scarce.

Surveys earlier on Wednesday showed Asian and European factory activity lost momentum in August as the coronavirus pandemic disrupted supply chains.

Economically sensitive energy stocks, materials and industrial stocks fell between 0.6% and 0.9%, keeping the S&P 500 and Dow subdued.

Rate-sensitive banks fell as U.S. government bond yields slipped. Wells Fargo fell 3.8%, extending losses for a second day after report of U.S. sanctions on the bank.

At 10:26 a.m. ET, the Dow Jones Industrial Average was down 45.90 points, or 0.13%, at 35,314.83, the S&P 500 was up 5.74 points, or 0.13%, at 4,528.42, and the Nasdaq Composite was up 84.99 points, or 0.56%, at 15,344.22.

Shares of Calvin Klein and Tommy Hilfiger owner PVH Corp surged 13.8% after it raised its full-year earnings forecast.

Video chipmaker Ambarella gained 19.3% after it beat profit estimates and forecast revenue above market expectations.

Advancing issues outnumbered decliners by a 1.24-to-1 ratio on the NYSE and by a 1.04-to-1 ratio on the Nasdaq.

The S&P index recorded 32 new 52-week highs and no new low, while the Nasdaq recorded 76 new highs and 9 new lows.

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