Nasdaq Jumps Amid Rally By Tech Stocks But Dow Closes In The Red

Stocks came under pressure going into the close of trading on Wednesday but managed to end the day mostly higher. The tech-heavy Nasdaq posted a particularly strong gain amid a rally by technology stocks.

The Nasdaq jumped 201.48 points or 1.5 percent to 13,246.87 and the S&P 500 rose 14.34 points or 0.4 percent to 3,972.89 after reaching a record intraday high. Meanwhile, the narrower Dow fell 85.41 points or 0.3 percent to 32,981.55.

The rally by technology stocks may partly have reflected window dressing on the final day of the first quarter, as the tech-heavy Nasdaq underperformed the Dow and the S&P 500.

The advance on the day helped the Nasdaq surge up by 2.8 percent for the quarter, although that compares to a 5.8 percent jump by the S&P 500 and a 7.8 percent spike by the Dow.

The Dow and the S&P 500 have also recently reached new record highs, while the Nasdaq remains well off its highs set last month.

A report from payroll processor ADP showing strong private sector job growth in the month of March also generated some positive sentiment.

ADP said private sector employment surged up by 517,000 jobs in March after climbing by an upwardly revised 176,000 jobs in February.

Economists had expected employment to jump by 550,000 jobs compared to the addition of 117,000 jobs originally reported for the previous month.

The increase in private sector employment in March reflected the strongest job growth since the spike of 821,000 jobs seen last September.

On Friday, the Labor Department is scheduled to release its more closely watched monthly jobs report, which includes both public and private sector jobs.

Economists currently expect employment to jump by 639,000 jobs in March after climbing by 379,000 jobs in February. The unemployment rate is expected to drop to 6.0 percent from 6.2 percent.

Meanwhile, traders were also reacting to the details of President Joe Biden’s infrastructure and economic recovery plan.

The plan calls for spending approximately $2 trillion over eight years, with the proposal including investments in transportation infrastructure and accelerating the transition to clean energy.

To pay for the plan, Biden has called for raising the corporate tax rate to 28 percent from 21 percent, which is likely to face intense opposition from Republican lawmakers.

Sector News

Semiconductor stocks turned in some of the market’s best performances on the day, resulting in a 2.6 percent spike by the Philadelphia Semiconductor Index. The index ended the session at its best closing level in a month.

Biotechnology, software and computer hardware stocks also saw notable strength on the day, contributing to the surge by the tech-heavy Nasdaq.

Considerable strength was also visible among gold stocks, as reflected by the 2.1 percent jump by the NYSE Arca Gold Bugs Index.

Gold stocks rebounded along with the price of the precious metal, with gold for June delivery soaring $29.60 to $1,715.60 an ounce after plunging $28.60 to $1,686 an ounce on Tuesday.

On the other hand, airline stocks gave back ground after Tuesday’s rally, resulting in a 1.2 percent drop by the NYSE Arca Airline.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan’s Nikkei 225 Index slumped by 0.9 percent, while China’s Shanghai Composite Index slid by 0.4 percent.

The major European markets also moved to the downside on the day. While the U.K.’s FTSE 100 Index tumbled by 0.9 percent, the French CAC 40 Index fell by 0.3 percent and the German DAX Index closed just below the unchanged line.

In the bond market, treasuries came under pressure going into the close after showing a lack of direction for much of the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2 basis points to 1.746 percent.

Looking Ahead

Reports on weekly jobless claims, manufacturing activity and construction spending may attract attention on Thursday, although trading activity may be somewhat subdued ahead of the holiday weekend.