Nasdaq gains 1% to end at record as tech giants surge

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The New York Stock Exchange is seen in Wall Street on June 29, 2020. PHOTO: AFP

NEW YORK (AFP) - Led by Amazon, Netflix and other tech giants, the Nasdaq surged to a fresh record close on Wednesday (July 1), while the Dow retreated as the US contends with a resurgent coronavirus crisis.

The tech-rich Nasdaq Composite Index ended up 1 per cent at 10,154.63.

The Dow Jones Industrial Average shed 0.3 per cent to 25,734.97, while the broad-based S&P 500 gained 0.5 per cent to 3,115.86.

California's governor ordered restaurants to close indoor dining in Los Angeles as officials around the United States urged Americans to stay at home during the upcoming Independence Day holiday, with states reporting thousands of new coronavirus cases.

Tech giants including Amazon, Facebook, Google parent Alphabet and Netflix gained between 1.7 per cent and 6.7 per cent as the so-called "stay-at-home" stock trade proved popular.

"It's the same sort of Covid rotation we saw at the beginning of the pandemic," said Chris Low, chief economist of FHN Financial. "What this means for a lot of people is working at home longer."

New US economic data showed improvement from the worst of the downturn earlier in the spring.

Private firms hired 2.4 million workers in June, according to data from payroll services firm ADP. Combined with the three million hires in May, it means a quarter of the 20 million people who lost jobs in March and April due to the pandemic have returned to work.

Separately, the Institute for Supply Management's manufacturing index jumped to 52.6 per cent in June, showing a return to growth as parts of the industry rebounded at unheard-of rates.

However, leading auto manufacturers, including General Motors and Fiat Chrysler, reported sharply lower car sales in the second quarter.

The companies said sales were better after lockdowns eased in May, even as fears mounted the resurgent pandemic could hit demand.

The weak reports sent GM down 1.3 per cent and Fiat Chrysler 3.3 per cent, but Tesla surged 3.7 per cent as the electric car maker overtook Toyota to become the biggest automaker by market value.

Pfizer jumped 3.2 per cent as it and German company BioNTech reported positive preliminary results from a joint project to develop a coronavirus vaccine.

FedEx surged 11.7 per cent after reporting better than expected quarterly profits. The report also boosted rival service UPS, which gained 2.9 per cent.

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