Stock Market Today: Tech Stocks on Top Again as Fed Seeks a Helping Hand
Amazon.com (AMZN), as well as a healthy swath of tech stocks, pushed ahead Tuesday as the Fed appealed for fiscal help and Europe's COVID situation worsened.
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The seesaw in market leadership tilted back toward tech on Tuesday as Federal Reserve leaders continued to stump for Congressional help and as European COVID concerns continued to bubble.
Fed Chair Jerome Powell told the House Committee on Financial Services that, while the economy is indeed improving, continued progress is "highly uncertain" and continued to stress the importance of additional fiscal stimulus. Separately, Chicago Fed President Charles Evans was more specific, saying the country risks "recessionary dynamics" without a new rescue package.
Meanwhile, the U.K. announced earlier closing hours on pubs and restaurants Tuesday, a day after Deutsche Bank analysts said to "expect lots more restrictions over the days and weeks ahead."
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The Nasdaq Composite climbed 1.7% to 10,963 thanks to gains in the tech and communications sectors. It was also helped by a 5.7% surge in Amazon.com (AMZN), which received a Buy call from Bernstein, launched a $499 Peloton (PTON, -0.4) knock-off bike called Prime Bike and set the stage for this year's Prime Day.
Other action in the stock market today:
- The Dow Jones Industrial Average improved by 0.5% to 27,288.
- The S&P 500 gained 1.1% to 3,315.
- The small-cap Russell 2000 finished 0.7% higher to 1,496.
- Tesla (TSLA) shares dropped 5.6% ahead of its "Battery Day" event, scheduled for this evening, in which it's expected to unveil a new type of battery cell. However, Musk dampened enthusiasm with tweets sent out Monday. "Important note about Tesla Battery Day unveil tomorrow," he said. "This affects long-term production, especially Semi, Cybertruck & Roadster, but what we announce will not reach serious high-volume production until 2022."
Make the Most Out of This Roller-Coaster Market
The market's tug-of-war continues as September lives up to its rocky reputation.
However, Kenny Polcari, managing partner at Kace Capital Advisors, notes that while COVID-19, the resulting economic fallout and the upcoming election have exacerbated a "typically volatile" period for stocks, it's not all negative.
"Most of the issues the market is dealing with are not fundamental in terms of corporate earnings and margins, so while they will create a lot of short-term noise, they can and will create opportunities," he says.
Polcari continues that there is "plenty to like in tech" – indeed, investors have their choice of tech trends to chase right now, be it e-commerce/fintech, cloud computing or 5G technology. He also notes that while tech's mega-cap stocks get all of the attention, "many of the other companies in the tech space don't get the respect they deserve," as shareholders of these 14 picks would likely attest.
Of course, if you're looking for growthy tech plays, you'll find numerous ideas from the unlikeliest of places: the mind of Warren Buffett. Yes, we know, he historically hasn't loaded up on the sector, but he (and his lieutenants) have increasingly warmed up to tech – and a number of those names can be found among what is a surprisingly large cohort of growth stocks.
Kyle Woodley was long AMZN as of this writing.
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