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Nasdaq Races to Record High as Big Tech Reigns Supreme

Stock MarketsAug 03, 2020 04:03PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The Nasdaq surged to record highs Monday as big tech continued to drive the broader market higher following bullish earnings last week, while healthcare names rallied on positive coronavirus treatment news.

The Nasdaq Composite jumped 1.47% to close at a record high. The Dow Jones Industrial Average rose 0.90%, or 236 points and the S&P 500 gained 0.69%. 

The tech-heavy Nasdaq was powered to all-time highs, led by Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT), with the latter up 5.6% after confirming that it was in talks to buy social media company TikTok from ByteDance.

The potential acquisition has been cheered by analysts on Wall Street, who believe that the addition of TikTok could boost Microsoft's consumer offering.

"(Satya) Nadella has essentially had the golden touch since becoming CEO… although the missing piece in the puzzle has been a consumer trojan horse strategy which TikTok can fill along with a re-rating/sum-of-the-parts valuation," Wedbush analyst Daniel Ives said in a note.

Beyond tech, healthcare also supported investor sentiment on stocks thanks to signs of progress in the race for a coronavirus treatment.

Eli Lilly (NYSE:LLY) said it would get a phase 3 trial of its experimental coronavirus treatment, LY-CoV555, underway, sending its shares 1.7% higher.

A lack of progress between U.S. lawmakers over the next coronavirus stimulus package, however, kept broader market gains in check.  

Unemployment assistance, set at $600 a week in March, has lapsed, and renewing it has remained a key sticking for lawmakers.

On the earnings front, Clorox (NYSE:CLX) slipped about 1.9% despite delivering quarterly results that beat on the top and bottom lines.

In economic news, signs of a turnaround in manufacturing continued.

ISM manufacturing data  for July showed an uptick to 54.2, beating expectations of 53.6. A reading above 50 in the ISM index indicates an expansion in manufacturing, which accounts for about 12% of the U.S. economy.

"We remain confident that manufacturing will be more resilient to Covid-related developments than the service side of the economy, and activity should continue to expand in coming quarters as the recovery takes hold," Jefferies (NYSE:JEF) said in a note.

Still, the path ahead for the economy is one paved with uncertainty.  

"I think the slowdown in July would be consistent with the idea that we shouldn’t expect a completely smooth transition as you go forward because this is a crisis and there’s going to be ups and downs," St. Louis Federal Reserve President James Bullard said on Monday.

Nasdaq Races to Record High as Big Tech Reigns Supreme
 

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Comments (7)
eddie glass
eddie glass Aug 03, 2020 7:24PM ET
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why would MSFT showing interest in buying tik tok increase the market cap of MSFT 5%?the market cap of MSFT is already $1.65 trillion. i do not think actual math or profits matter in this market anymore. basically 5 stocks market up 20% of the entire stock market because this is a bubble with nothing to invest in that has true growth potential.
Ben Ramirez
Ben Ramirez Aug 03, 2020 7:24PM ET
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And Kramer telling everyone that we should stop saying the markets make no sense....ya, hey man. It makes no sense.
Zac Sun
Zac Sun Aug 03, 2020 6:20PM ET
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NQ could keep ATH only by splitting stocks.
Gamer Turtle
GamerTurtle Aug 03, 2020 5:35PM ET
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look at it, it doesn't look like it is ready for a crash, triple try at new ath in this range is likely a sign it'll go higher from here. I suspect new stimulus is going to get ppl to buy more iPhone will take apple share much higher.
Plopseven Schwartz
Plopseven Schwartz Aug 03, 2020 5:35PM ET
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No, stimulus will go directly to paying for rent and food. New York is reporting 1/3 of small businesses are closed permanantly.
Gamer Turtle
GamerTurtle Aug 03, 2020 5:35PM ET
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Plopseven Schwartz  unlikely the case for most people. most people who can't pay rent now probably won't if their unemployment paycheck isn't cutting it. why pay rent when you can just skip rent, stay in while eviction is illegal at the moment. after all, if you're kicked out, you can just move on, no one is going to take you to court for few months of rent. too much trouble and no guaranty that they can get a penny from you if you're expected to be unemployed for months to come.
eddie glass
eddie glass Aug 03, 2020 5:27PM ET
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"Guns Join Clorox Wipes as Top Pick in Times of Global Coronavirus Pandemic"... the fa.ke news says people support all the "peaceful protests"... the gun sales let you know reality
Matt Kay
Matt Kay Aug 03, 2020 4:54PM ET
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Fake market goes up for no reason! Just like Kodak pump and dump. /NQ is doing the same thing.
Fx Ho
Fx Ho Aug 03, 2020 4:22PM ET
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How about market tomorrow
Matt Kay
Matt Kay Aug 03, 2020 4:22PM ET
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Up another 2%
Camaro Camero
Camaro Aug 03, 2020 4:20PM ET
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11k tomorrow. Enjoy your TQQQ while you can!
 
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