S&P tops 2,700 on tech advance, holds gains after Fed minutes

VIDEO: REUTERS

NEW YORK (REUTERS) - The S&P 500 index rose above 2,700 for the first time on Wednesday (Jan 3) and other major indexes hit record highs as technology stocks climbed amid indications of robust economic growth in the United States and overseas.

Stocks held gains following the release of minutes of the Federal Reserve's last policy meeting. Details of the meeting showed that policymakers were worried over the fate of currently low inflation and saw the recent tax changes as providing a boost to the economy.

"It emphasises the message they've had out there, that they'll be data dependent and that they want to try to normalise policy unless there's an economic slowdown or inflation doesn't act as expected," said Sameer Samana, global equity and technical strategist at Wells Fargo Investment Institute in St Louis.

"It was at least interesting that they tipped their hats to the tax cuts."

Earlier in the session, a report showed US factory activity increased more than expected in December, in a further sign of strong economic momentum at the end of 2017. Meanwhile, manufacturing surveys pointed to a strong start for the European economy.

The technology sector was boosted by a rise in shares of Alphabet, IBM and chipmakers. The S&P 500 tech index - the best-performing S&P 500 sector in 2017 with a 37 per cent jump - was up 1 per cent.

US chipmaker stocks surged for second straight session, with the Philadelphia Semiconductor index up 1.4 per cent and heading for its strongest two-day performance since July.

 

The Dow Jones Industrial Average rose 48.67 points, or 0.2 per cent, to 24,872.68, the S&P 500 gained 13.73 points, or 0.51 per cent, to 2,709.54 and the Nasdaq Composite added 52.86 points, or 0.75 per cent, to 7,059.75.

Oracle shares were up 2.5 per cent after Morgan Stanley upgraded the stock.

Gains in energy and healthcare also boosted the market. The S&P energy index was up 1.5 per cent while S&P healthcare was up 1 per cent.

Intel fell 6.2 per cent following a report that its processor chips had a fundamental design flaw.

Rival chipmaker Advanced Micro Devices climbed 9.5 per cent. Nvidia gained 6.6 per cent and Micron rose 2.8 per cent.

Advancing issues outnumbered declining ones on the NYSE by a 1.31-to-1 ratio; on Nasdaq, a 1.41-to-1 ratio favoured advancers.