U.S. Stocks Open Higher as Tech Shares Extend Rally
By Anna Hirtenstein
U.S. stocks ticked up Tuesday as tech shares continued to climb
in the wake of a flurry of M&A activity in the sector.
The S&P 500 advanced 0.8%, while the Dow Jones Industrial
Average added 0.7%. The Nasdaq Composite Index rose 1.2%, pointing
to another day of gains for technology stocks.
A wave of multibillion-dollar deals emerging earlier this week
from well-known tech companies could boost stock benchmarks for a
second day, underscoring the outsized role of a handful of giant
firms in U.S. equity markets.
"There's been exuberance in the tech sector and valuations are
high, but M&A means some people think there's still some assets
that aren't overvalued, they may actually be undervalued," said
Ludovic Subran, chief economist at Allianz. "M&A can be
perceived as a sign of undervaluation" and some people will be
Tech stocks continued to climb in premarket trading, extending
Monday's rally. Apple rose 2.9% and Tesla added 4.1%. Nvidia shares
advanced 3.1% after it said earlier this week it would acquire chip
designer Arm Holdings from SoftBank.
Industrial production figures for August rose 0.4% in August,
marking a slowdown in the pace of the recovery compared to the
previous month, as retightened restrictions in some states affected
demand. They were lower than economists' estimates.
Earlier Tuesday, key economic statistics showed that China's
economic recovery accelerated in August. Retail sales in the Asian
nation returned to pre-coronavirus levels with their first month of
growth this year. Other major indicators, including factory
production, investment and property activity, all gathered pace,
signaling a strong rebound for the world's second-largest
"It paints a fairly robust picture of the Chinese economy," said
Sebastien Galy, a macro strategist at Nordea Asset Management.
"It's a solid positive surprise, but the data tells you more about
the message the Chinese government wants to give you."
The Shanghai Composite Index closed up 0.5%, and Hong Kong's
Hang Seng Index rose 0.4%. The yuan strengthened 0.5% against the
dollar in offshore trading, climbing to the highest level since May
The pan-continental Stoxx Europe 600 rose 0.7% from an
anticipated boost in Chinese demand for European goods. The U.K.'s
FTSE 100 index climbed 1.1%, led by mining shares. Glencore added
3.4%, BHP Group was up 2.4% and Anglo American rose 2.6%.
In the U.S., "a lot of people will be looking to industrial
production to see if the economic recovery is picking up," Mr. Galy
said. "I wouldn't be surprised if we also see good numbers there,
there's a lot of pent-up demand in the U.S."
Gold rose 0.7% to $1,977.40 a troy ounce, the highest level in
nearly a month. The yield on 10-year U.S. Treasury bonds ticked up
to 0.682%, from 0.669% on Monday.
Among European equities, Sweden's H&M Hennes & Mauritz
jumped 11.6% after the fashion retailer's third-quarter preliminary
pretax profit beat analysts' estimates.
Fiat Chrysler Automobiles climbed nearly 11% after the car maker
changed the terms of its merger with PSA Group to preserve cash.
Fiat Chrysler will pay a cash dividend of EUR2.9 billion,
equivalent to $3.44 billion, to shareholders, down from the
previously agreed EUR5.5 billion. PSA, which owns the Peugeot and
Citroën brands, agreed to distribute its $3.2-billion stake in car
parts supplier Faurencia to shareholders, instead of selling
In U.S. premarket trading, NextEra Energy rose 7.1% after the
utility raised its outlook for next year and announced a stock
Later in the day, FedEx will report quarterly earnings after
markets close. The global shipping company is considered an
economic bellwether, as its revenue growth may indicate higher
levels of business activity.
Write to Anna Hirtenstein at email@example.com
(END) Dow Jones Newswires
September 15, 2020 09:46 ET (13:46 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
From Aug 2020 to Sep 2020
From Sep 2019 to Sep 2020