S&P 500, Nasdaq up as tech stocks rise after J&J vaccine pause

The S&P 500 hit a record high on Tuesday and the Nasdaq jumped as investors flocked to technology-related stocks after the United States’ pause in the rollout of Johnson & Johnson’s COVID-19 vaccine sparked fears of a delay in a broader economic rebound.

The drugmaker’s shares fell 2.7% to a one-month low as calls for pausing the use of its COVID-19 vaccine after six women developed rare blood clots dealt a fresh setback to efforts to tackle the pandemic.

The technology and consumer discretionary sectors, which house high-flying technology names that flourished during coronavirus-induced lockdowns last year, rose 0.6% and 0.4%, respectively. Apple Inc, Microsoft Corp and Inc gained between 0.4% and 1.3%.

The news also helped Wall Street’s main indexes shrug off a solid jump in the consumer price index (CPI) in March, kicking off what most economists expect will be a brief period of higher inflation.

“While the jump in CPI is pretty significant, the market may take it with a grain of salt - it could already be priced in as the market has been skittish about rates for some time,” said Mike Loewengart, managing director at investment strategy at E*TRADE Financial.

“The real curveball today is the J&J vaccine halt, although this too may be shrugged off as a minor setback. While this may cause some short-term volatility, investors have been pretty steadfast in their faith in a full economic recovery.”

White House economic adviser Jared Bernstein said it was too soon to say what impact the pause could have on President Joe Biden’s push to reopen the country.

At 11:56 a.m. EDT the Dow Jones Industrial Average fell 120.21 points, or 0.36% , to 33,625.19, the S&P 500 gained 4.79 points, or 0.12 %, to 4,132.78 and the Nasdaq Composite gained 69.93 points, or 0.50 %, to 13,919.93.

The NYSE FANG+TM Index jumped 1.4%, rising for the 12th straight session.

Meanwhile, cruise operators, airlines and hotel chains that are poised to benefit from an economic reopening, driven by vaccine distributions, edged lower.

Investors were marking time ahead of the first-quarter earnings season that begin in earnest, with results from Goldman Sachs, JPMorgan and Wells Fargo expected on Wednesday.

The S&P 500 briefly broke above its record high set on Friday, before slipping into negative territory.

At 1:50 p.m. ET, the Dow Jones Industrial Average fell 101.87 points, or 0.3%, to 33,698.73, the S&P 500 lost 5.03 points, or 0.12%, to 4,123.77 and the Nasdaq Composite dropped 53.56 points, or 0.39%, to 13,846.62.

Tesla Inc rose 3.3% after Canaccord Genuity upgraded the electric-car maker’s shares to “buy,” saying the company could become “the brand” in energy storage.

U.S. shares of Alibaba Group Holding Ltd jumped 8.9% after the ecommerce company said it expected no material impact from China’s antitrust crackdown that pushes it to overhaul how it deals with merchants.

Shares of Nuance Communications Inc surged 16.2% after Microsoft Corp said it would buy the artificial intelligence and speech technology company in a $19.7 billion deal.

Declining issues outnumbered advancing ones on the NYSE by a 1.26-to-1 ratio. On Nasdaq, a 2.03-to-1 ratio favored decliners.

The S&P 500 posted 69 new 52-week highs and no new lows; the Nasdaq Composite recorded 80 new highs and 66 new lows.

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