Nasdaq Composite Climbs Toward Fresh Record
May 16 2017 - 3:18PM
Dow Jones News
By Akane Otani and Mike Bird
The Nasdaq Composite headed toward a fresh record close as
shares of technology companies climbed in an otherwise downbeat
session.
The tech-heavy index has outperformed both the S&P 500 and
the Dow Jones Industrial Average in 2017 as investors have piled
into the shares of companies thought to benefit from U.S. economic
growth.
That's left the Nasdaq up about 14% this year, while the S&P
500 has gained 7.2% and the Dow industrials have risen 6.2%.
Still, some investors and analysts caution that technology
stocks, which have risen double-digit percentages in the S&P
500 in 2017, may be vulnerable to a pullback. Global fund managers
say the Nasdaq has become the most crowded trade, Bank of America
Merrill Lynch found in a survey published Tuesday.
The Nasdaq Composite rose 0.3% on Tuesday, on course for its
33rd record close of the year. The Dow Jones Industrial Average
fell 1 point, or less than 0.1%, to 20982 and the S&P 500 lost
less than 0.1%.
Others say political uncertainty in the U.S. could more broadly
weigh on stocks, especially if they appear to reduce the chances of
tax cuts, which many hope will boost earnings. Bets on lower tax
rates under the Trump administration had helped U.S. stocks rally
after Election Day.
"In terms of potential implications for the markets, finding
support in Congress for fiscal measures may prove even more
difficult for President Donald Trump if the latest reports
undermine his relationship with the Republicans," said Piotr Matys,
foreign-exchange strategist at Rabobank, referring to reports that
the president shared sensitive intelligence obtained from a close
U.S. ally with Russia's foreign minister and ambassador.
Technology stocks rose 0.4% in the S&P 500 on Tuesday, led
by gains in shares of Yahoo, which added 2.5% after the company
announced it would buy back up to $3 billion of its common stock
ahead of its proposed deal with Verizon Communications.
Real estate shares slid 0.4% in the S&P 500, among the
worst-performing sectors in the broad index Tuesday, after data
showed U.S. new-home construction declined in April for the third
time in four months.
As stocks fell, government bonds ticked higher, with the yield
on the 10-year U.S. Treasury note falling to 2.329% from 2.338%
Monday. Yields fall as bond prices rise.
Elsewhere, the Stoxx Europe 600 finished down less than
0.1%.
Japan's Nikkei Stock Average edged up 0.3% and the Shanghai
Composite rose 0.7%, posting its fourth consecutive session of
gains.
Write to Akane Otani at akane.otani@wsj.com and Mike Bird at
Mike.Bird@wsj.com
(END) Dow Jones Newswires
May 16, 2017 16:03 ET (20:03 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.