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Nasdaq Racks Up More Gains as Bond Yields Head Lower

Stock Markets43 minutes ago (Mar 22, 2021 01:33PM ET)

(C) Reuters

By Yasin Ebrahim – The Nasdaq climbed Monday as falling U.S. bond yields prompted fresh buying of tech stocks after last week’s rout.

The Dow Jones Industrial Average rose 0.34%, or 110 points, the S&P 500 was up 0.33%, while the Nasdaq Composite was up 1.52%.

The United States 10-Year yield fell below 1.7% following a surge to 14-month highs last week, driven by technical factors that analysts say pushed rates too high too fast and will likely continue to subside.

The recent price action has been driven by overnight selling and U.S. banks holding back demand – all of which are “likely to temper or reverse,” Morgan Stanley (NYSE:MS) said in a note.

Facebook (NASDAQ:FB), Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), (NASDAQ:AMZN) and Google-parent Alphabet (NASDAQ:GOOGL) were in the green.

Tesla (NASDAQ:TSLA), meanwhile, also helped prop up the Nasdaq after rallying 6% in the wake of a bullish note from ARK fund manager Cathie Wood. Wood estimated that Tesla shares will rise to $3,000 by 2025.

iShares PHLX Semiconductor ETF (NASDAQ:chip stocks) inched higher despite ongoing supply-issues in the industry.

The decline in rates, however, triggered selling of rate-sensitive bank stocks, pushing financials and the broader value sector lower.

Sentiment on value stocks – those which tend to rise in an improving economy – was also dented somewhat by a third wave of Covid-19 in Europe that threatens global demand.

United Airlines Holdings (NASDAQ:UAL), Delta Air Lines (NYSE:DAL) and American Airlines Group (NASDAQ:AAL) fell into the red, with the latter down about 4%, shrugging off data showing U.S. air travel hit one-year high.

The Transportation Security Administration said that it screened 1.5 million people on Sunday, the highest number of passengers it has seen on a single day since March 13 of last year.

Energy stocks were paced by a sluggish oil prices as investor jitters that lockdowns across Europe will stifle air travel, hurting demand for jet fuel.

In other news, U.S.-China trade tensions appear to be on the rise again after the U.S. imposed sanctions against two Chinese officials over alleged human rights abuses. The move came as the European Union, the United Kingdom and Canada took similar action against China.

Nasdaq Racks Up More Gains as Bond Yields Head Lower

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