Tech stocks mixed after recent surge; banks lift S&P, Dow

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(Reuters) – Gains for Amazon and Tesla helped the Nasdaq open at a record high on Wednesday, before the index fell slightly as Facebook led a decline in the technology sector.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 29, 2018. REUTERS/Brendan McDermid

Tesla Inc jumped 5 percent after billionaire Chief Executive Officer Elon Musk reassured shareholders that building 5,000 of its mass-market Model 3 cars per week by the end of June was “quite likely”.

The Nasdaq had closed at record highs on both Monday and Tuesday, helped by gains for Apple, Amazon and other tech giants.

However, the S&P technology sector was down 0.13 percent on Wednesday.

Facebook fell 1.3 percent after two key U.S. lawmakers rebuked it for not being more transparent over its data sharing with at least four Chinese companies.

The benchmark U.S. Treasury yield rose to a near two-week high after data showed that U.S. trade deficit unexpectedly fell to a seven-month low in April, supporting the view of an acceleration of domestic economic growth in the second quarter.

Bank stocks often trade in line with Treasury yields, as higher rates can boost their profits. The S&P banking index was up 1.1 percent.

U.S. officials were weighing an offer by China to import an extra $70 billion of American goods over a year as Beijing tries to defuse a potential trade war between the world’s two largest economies, according to sources.

“There is no new escalation on the trade front and as a result, there is absence of bad news, and stocks will tend to rebound in a relief rally,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin.

U.S. President Donald Trump is due to attend a G7 summit in Canada later this week, where leaders were likely to discuss the global economy and concerns about U.S. trade policy.

Six of the other G7 countries — Britain, Canada, France, Germany, Italy and Japan — are now paying the metals import tariffs Trump announced earlier this year.

Trump last week pushed on with imposing the tariffs — 25 percent on steel and 10 percent on aluminum — on Canada, the EU and Mexico, with Mexico retaliating by putting tariffs on American products ranging from steel to pork and bourbon.

At 10:20 a.m. ET, the Dow Jones Industrial Average was up 87.76 points, or 0.35 percent, at 24,887.74, the S&P 500 was up 1.10 points, or 0.04 percent, at 2,749.90 and the Nasdaq Composite was down 11.55 points, or 0.15 percent, at 7,626.31.

Signet Jewelers jumped 14.6 percent after reporting a surprise profit and higher-than-expected revenue in the first quarter.

L Brands rose 0.8 percent after the Victoria’s Secret owner reported a 10 percent jump in sales in May.

Advancing issues outnumbered decliners for a 1.18-to-1 ratio on the NYSE and for a 1.26-to-1 ratio on the Nasdaq.

The S&P index recorded 34 new 52-week highs and eight new lows, while the Nasdaq recorded 170 new highs and 10 new lows.

Reporting by Medha Singh in Bengaluru; Editing by Shounak Dasgupta

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