U.S. stocks rose on Monday as technology stocks rebounded from a recent pullback that was sparked by a surge in bond yields, while Tesla jumped as a fund run by an influential investor said the electric-car maker’s shares could hit $3,000 in three years.
Tesla Inc’s 5.5% jump to $690 provided the biggest boost to the S&P 500 and Nasdaq. Ark Invest, founded by star stock picker Cathie Wood, has been extremely bullish about the company, in which it is one of the major investors.
A sharp run-up in Treasury yields since mid-February has dictated the course of equities trading, while weighing on high-flying tech-focused stocks.
“The market is trying to digest what’s going on in the bond market,” said Jake Wujastyk, chief market analyst and founding member of TrendSpider.
“The technology stocks are pretty beaten down and it’s not shocking to see those rebounding a little bit from their lows.”
Russell 2000 Growth, which consists largely of technology stocks, added about 0.7%, while its value counterpart, which focuses on economy-linked financial and energy stocks, dropped about 0.3%.
The Nasdaq climbed about 0.8% to start the week as the benchmark 10-year Treasury yield dipped to 1.688% from a near 14-month high. The index is still down more than 6% from its Feb. 12 record close.
The S&P 500 and the Dow, however, clinched all-time highs as early as last week on bets that stimulus and vaccine rollouts would lead to a strong rebound in the U.S. economy.
Kansas City Southern jumped about 13% after Canadian Pacific Railway Ltd agreed to acquire the railroad operator in a $25 billion cash-and-stock deal to create the first railway spanning the United States, Mexico and Canada.
At 11:51 a.m. EDT the Dow Jones Industrial Average rose 60.07 points, or 0.18%, to 32,688.04, the S&P 500 gained 26.45 points, or 0.68%, to 3,939.55 and the Nasdaq Composite gained 171.73 points, or 1.30%, to 13,386.97.
Bank stocks, which have enjoyed a rally on brightening economic prospects, dropped about 1%.
The S&P 500 tech index jumped about 2%, while materials, industrials, energy and financials were in the red.
The iShares MSCI Turkey ETF sank about 18% as President Tayyip Erdogan’s decision to oust a hawkish central bank governor sparked fears of a reversal of recent rate hikes.
Declining issues outnumbered advancers by a 1.3-to-1 ratio on the NYSE and by a 1.2-to-1 ratio on the Nasdaq.
The S&P 500 posted seven new 52-week highs and no new lows, while the Nasdaq recorded 101 new highs and 56 new lows.