Tech rally leads US stocks higher

People pass by the Fearless Girl bronze sculpture - featuring a face mask - in front of the New York Stock Exchange. PHOTO: AFP

NEW YORK (AFP) - Led by tech giants, Wall Street stocks finished solidly higher on Wednesday (May 20) as investor optimism over the reopening of the economy offset worries about the hit from coronavirus shutdowns.

The tech-rich Nasdaq Composite Index jumped 2.1 per cent to 9,375.78, with Amazon and Facebook both closing at all-time highs.

The Dow Jones Industrial Average gained 1.5 per cent to 24,575.90, while the broad-based S&P 500 advanced 1.7 per cent to 2,971.61.

Stocks have had a topsy-turvy week, rallying hard on Monday, retreating on Tuesday and bouncing again Wednesday as investors weigh the latest on the coronavirus.

Both Amazon and Facebook surged following new program announcements in the last day that pushed their businesses ahead at a time when many consumers are stuck at home because of the coronavirus.

Facebook rocketed 6 per cent higher after unveiling tools for retailers hit by the pandemic to create online storefronts at the social network and Instagram, while Amazon advanced 2 per cent as it released the online game "Crucible" as a potential rival to monster hit "Fortnite."

After a terrible March, stocks have lately risen on hopes the US economy will quickly bottom out and rebound solidly.

But Federal Reserve minutes showed worries about the lasting damage from Covid-19 on businesses.

Policymakers worried that "even after social-distancing requirements were eased, some business models may no longer be economically viable," especially if consumers decide to "avoid participating in particular forms of economic activity," the minutes said.

Big-box retailer Target fell 2.9 per cent after reporting an 11.3 per cent jump in first-quarter revenues to US$19.6 billion. However, the company suffered a 64.3 per cent drop in profits to US$284 million due to higher costs.

The results demonstrated the juggling act essential stores are doing during the Covid-19 crisis as they bonuses to hourly workers and spend more on cleaning.

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