S&P 500 and Nasdaq hit record highs as investors pump funds into tech stocks

The S&P 500 and the Nasdaq hit record highs on Wednesday as investors bought into technology stocks that have thrived during the Covid-19 pandemic following upbeat quarterly results from Salesforce and HP Enterprise.

Salesforce.com, which is set to enter the blue-chip Dow index next week, surged 27.3 per cent as it raised its annual revenue forecast due to high demand for its online business software.

Hewlett Packard added 6.2 per cent as its full-year profit outlook came ahead of market expectations and income-tax filing software firm Intuit advanced 1.1 per cent after it reported a jump in quarterly revenue.

The tech sector climbed 1.5 per cent, but seven of the 11 major S&P sectors eased. The MSCI world equity index hit an all-time high.

"Markets are pricing in uncertainty in regards to some of the coronavirus-related economic impact, due to which the stay-at-home and technology stocks have seen a renewed source of relative strength," said Matt Stucky, portfolio manager, equities, at Northwestern Mutual Wealth Management in Milwaukee, Wisconsin.

Adding to the upbeat mood was early data from Moderna's experimental Covid-19 vaccine which showed it induced immune responses in older adults that were similar to younger participants.

The S&P 500 and the Nasdaq have hit a series of record closing highs recently, driven by stimulus and demand for tech-focused stocks, even though economic data pointed to an uneven recovery from a recession.

All eyes will be on Fed Chair Jerome Powell's address at the virtual Jackson Hole symposium before markets open on Thursday, where he is expected to outline a softer policy stance on inflation.

"Allowing higher levels of inflation that they'd be comfortable with in the economy is a sign that loose financial and monetary policy is going to be the norm for quite some time," Mr Stucky said.

At 11.10 am ET, the Dow Jones Industrial Average was down 66.91 points, or 0.24 per cent, at 28,181.53, the S&P 500 was up 13.24 points, or 0.38 per cent, at 3,456.86. The Nasdaq Composite was up 112.91 points, or 0.98 per cent, at 11,579.39.

Nordstrom tumbled 5.4 per cent after reporting a bigger-than-expected loss as its stores were shut for about half of the reported quarter and consumers stayed at home with little need for designer clothes.

Declining issues outnumbered advancers for a 1.53-to-1 ratio on the NYSE and for a 1.35-to-1 ratio on the Nasdaq.

The S&P index recorded 25 new 52-week highs and no new low, while the Nasdaq recorded 67 new highs and three new lows.