Wall Street rises as megacap stocks bounce; Dow hits record high

Wall Street’s main indexes and the Dow hit a record high on Wednesday, as growth stocks bounced from a steep selloff in the previous session and a survey showed private jobs rose in April.

Technology-related companies including Apple Inc (AAPL.O), Microsoft Corp (MSFT.O), Inc (AMZN.O), Facebook Inc (FB.O) and Alphabet Inc (GOOGL.O) rose between 0.1% and 1.7%.

The S&P 500 technology sector (.SPLRCT) gained 0.9%, while the Philadelphia SE Semiconductor index (.SOX) added 1.8%.

“With stock indexes at or near record highs and coming off a massive rally in the past year, there’s a counterintuitive reaction function to the positive earnings reports to sell the news,” Art Hogan, chief market strategist at National Securities in New York, wrote in a client note.

“We would continue to recommend a diversified equity allocation with a barbell approach that has growth exposure on one end, and economically sensitive cyclical exposure on the other end.”

Six of the 11 major S&P 500 sectors rose in early afternoon trading, with commodity-sensitive sectors including energy (.SPNY) and materials (.SPLRCM) rising 3.5% and 1.3%, respectively.

Defensive utilities (.SPLRCU) fell 2.2% and real estate (.SPLRCR) dropped 1.3%, leading sectoral declines.

The ADP National Employment Report showed U.S. private payrolls increased in April as companies rushed to boost production amid a surge in demand, powered by massive government aid and rising vaccinations against COVID-19.

A more comprehensive reading in the form of the Labor Department’s non-farm payrolls data is due on Friday.

Strong economic data and earnings pushed the S&P 500 (.SPX) and Nasdaq (.IXIC) indexes to record high last week, but markets have wobbled amid concerns about rising inflation and potentially higher U.S. interest rates.

“Once you have markets hitting the highs we have seen recently, the one thing investors are worried about is rising inflation and what that means for profitability of companies,” said Shawn Cruz, senior market strategist at TD Ameritrade.

At 12:10 p.m. ET, the Dow Jones Industrial Average (.DJI) was up 155.88 points, or 0.46%, at 34,288.91, the S&P 500 (.SPX) was up 22.33 points, or 0.54%, at 4,186.99 and the Nasdaq Composite (.IXIC) was up 85.27 points, or 0.63%, at 13,718.77.

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