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Tech stocks take Nasdaq, S&P close to record

(Reuters) – The S&P and the Nasdaq inched towards a record on the back of high-flying technology trio of Apple, Amazon and Microsoft.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 18, 2018. REUTERS/Brendan McDermid

The tech-heavy index .IXIC was up 0.33 percent at 7,914.22, a quarter of a percent away from hitting an all-time high.

The technology sector has been at the center of a sharp recovery in U.S. stocks since a market rout in February. The S&P is also less than half a percent shy of the record it hit in late January.

Shares of Apple (AAPL.O) rose 1 percent, while those of Amazon (AMZN.O) were up 0.8 percent and Microsoft (MSFT.O) 0.4 percent.

“There is low volatility in the markets as the S&P and Nasdaq are just below all-time record highs, and it seems like markets are complacent right now,” said Tom White, chief market strategist at TradeWise Advisors, in Chicago, Illinois.

“It’s a risk-on trade. Investors are more comfortable with FAANG stocks and technology as far as valuations go, and these stocks have higher margins.”

The gains come as the latest data pointed to the strength in the labor market, underscoring the health of the economy despite ongoing trade tensions.

The number of Americans filing for unemployment benefits unexpectedly fell last week, a Labor Department report showed.

The Dow Jones Industrial Average .DJI was the only laggard among the three major indexes. It was down 29.07 points, or 0.11 percent, at 25,554.68.

The S&P 500 .SPX was up 0.59 points, or 0.02 percent, at 2,858.29.

Seven of the 11 major S&P sectors were higher, with the materials sector .SPLRCM leading the gains as aluminum prices rose.

The energy sector was the biggest loser, dragged down by Occidental Petroleum, the largest Permian producer, which boosted its capital expenditure.

Bookings Holdings (BKNG.O) fell 5.9 percent and weighed the most on the S&P and the Nasdaq after it forecast third-quarter profit below expectations.

Sinclair (SBGI.O) dropped 2.9 percent after Tribune Media (TRCO.N) dropped its $3.9 billion deal to be acquired by Sinclair and filed a lawsuit against the company for breach of contract. Tribune shares rose 2.9 percent.

Rite Aid (RAD.N) fell 9.5 percent and was the most actively traded stock after the drug store chain and U.S. grocer Albertsons Cos ABS.N agreed to terminate their merger agreement.

Chip stocks fell after Morgan Stanley downgraded the U.S. semiconductor industry, saying upside to estimates is difficult to come by. Micron (MU.O), Applied Materials (AMAT.O) and ON Semiconductor (ON.O) fell between 1.8 percent and 2.4 percent.

Advancing issues outnumbered decliners by a 1.24-to-1 ratio on the NYSE and by a 1.39-to-1 ratio on the Nasdaq.

The S&P index recorded 25 new 52-week highs and TWO new lows, while the Nasdaq recorded 85 new highs and 51 new lows.

Reporting by Amy Caren Daniel in Bengaluru; Editing by Anil D’Silva

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