Reuters.com:
The Nasdaq was set to open at a new high on Thursday on hopes that the Federal Reserve would maintain an accommodative policy amid signs that a broader economic recovery was slowing.
Heavyweight technology stocks including Apple Inc (AAPL.O), Netflix Inc (NFLX.O) and Amazon.com Inc (AMZN.O), which tend to perform better when interest rates are low, were among the biggest gainers in premarket trading.
Oil majors Exxon Mobil (XOM.N), Chevron Corp (CVX.N) and Schlumberger NV (SLB.N) also rose between 0.2% and 0.5%, tracking crude prices.
The S&P 500 and the tech-heavy Nasdaq have consistently hit record highs over the past few weeks as a solid corporate earnings season underpinned confidence even as data showed the post-pandemic U.S. economic growth was beginning to slow.
“There were worries that the market is hitting records only because of a handful of heavyweight names, but now there doesn’t seem to be any specific sector leading gains which is one of the reason we don’t expect a heavy correction this year,” said Randy Frederick, vice president of trading and derivatives at Charles Schwab.
The small-cap Russell 2000 (.RUT) has jumped 17.5% so far this year and has more than doubled its value since its March 2020 lows.
“The Russell has performed really well over the past two weeks which also gives an idea that investors hope the Fed will not taper soon enough as stocks in the index don’t really perform well in a high interest rate scenario,” Frederick said.
Still, strategists said those highs could be challenged as the rebound in corporate profits loses its edge and the pressure builds on the Fed to taper its massive stimulus.
A Reuters poll last month showed the S&P 500 (.SPX) is likely to end 2021 at 4,500 points, slightly lower than current levels.
Meanwhile, the number of Americans filing new claims for jobless benefits fell last week, although focus will be on the Labor Department’s monthly jobs report on Friday, which could set the stage for the Fed’s policy meeting later in the month.
At 8:49 a.m. ET, Dow e-minis were up 98 points, or 0.28%, S&P 500 e-minis were up 12.5 points, or 0.28%, and Nasdaq 100 e-minis were up 49.5 points, or 0.32%.
A set of merger deals also helped sentiment. Quanta Services Inc (PWR.N) rose 7.1% after it said it will buy privately held Blattner Holding Company in a deal valued at about $2.7 billion.
Medtech firm Baxter International (BAX.N) added 1.9% after saying that it would buy rival Hill-Rom Holdings Inc (HRC.N) for roughly $10.5 billion. Hill-Rom jumped 4%.
Online pet supplies store Chewy dropped 9.8% after it reported a bigger-than-expected quarterly loss and missed Wall Street revenue estimates.
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