Stocks rose on Wednesday in volatile trading as gains in major tech names offset declines in shares that would benefit from the economy reopening.
The Dow Jones Industrial Average traded 57 points higher, or 0.2%. Earlier in the day, the Dow was up more than 200 points and briefly turned negative. The S&P 500 climbed 0.4% and the Nasdaq Composite advanced nearly 1%.
Apple rose 2% to a record high after a Deutsche Bank analyst hiked his price target on the stock. Microsoft shares gained 1.3% and Netflix climbed 1.2%. Amazon traded 1.5% higher.
“It seems like you flip a switch when those Covid cases go up, the country takes a step back in terms of reopening the economy and all those names find high demand,” said Christian Fromhertz, CEO of The Tribeca Trade Group, referring to tech and software shares. If that changes, he added, “people will start to look at the more under-owned names once again.”
Names that would benefit from the economy reopening were under pressure. Delta and American Airlines fell 2% and 1.8%, respectively. United Airlines slid 3% after the company warned 36,000 employees about potential job cuts. Southwest dropped more than 1%.
Wednesday’s move higher comes as the U.S. reported a record daily spike of more than 60,000 coronavirus cases on Tuesday. The total number of confirmed U.S. cases not totals more than 3 million, according to Johns Hopkins University.
Coronavirus-related deaths have risen to more than 131,000 in the U.S., according to Hopkins.
“The COVID numbers in the US remain troubling and this is beginning to create economic headwinds,” said Adam Crisafulli, founder of Vital Knowledge, in a note.
White House economic advisor Larry Kudlow tried to assuage concerns over the virus’ impact on the economy, telling CNBC’s “Squawk Box” the data indicates a sharp recovery.
“No one’s denied we’ve had a huge jump in cases in certain hot spots,” Kudlow said Wednesday. However, “one cannot rule out: There’s a lot of scenarios here. We really don’t have any real experience in econometrics modeling for this type of thing. Because so much is generated by the virus. At the moment, we’ve created 8 million new jobs the last couple of months. … Virtually every piece of data shows a V-shaped recovery.”
On Tuesday, the S&P 500 and Nasdaq snapped a five-day winning streak, while the Dow slid nearly 400 points.
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