(Reuters) – The S&P 500 rose on Friday, extending a six-day rally led by technology stocks as the prospect of super-low interest rates for a prolonged period and bets on a medical solution to the COVID-19 pandemic spurred risk appetite.
The tech sector’s 0.7% rise provided the biggest boost to the benchmark index. Energy stocks advanced 0.6% as hurricane Laura passed the heart of the U.S. oil industry in Louisiana and Texas without causing any widespread damage to refineries.
The Federal Reserve on Thursday unveiled a plan to support inflation and restore the U.S. economy from its biggest downturn since the Great Depression.
Data on Friday showed U.S. consumer spending increased more than expected in July, though momentum is likely to ebb as the COVID-19 pandemic lingers and fiscal stimulus dries up with no sight of the next round of coronavirus relief package.
“There’s no question consumer spending is going to be under some stress until we get additional fiscal support,” said Albert Brenner, director of asset allocation strategy at People’s United Advisors in Bridgeport, Connecticut.
The S&P 500 and the Nasdaq have scaled record highs and the benchmark is on track for its best August in 34 years, partly powered by a rally in technology stocks, while the blue-chip Dow traded above the break-even level for 2020.
“We’d like to see a sort of a broadening of (stocks in the rally); that would indicate to us some greater confidence of market participants in the economic recovery,” Brenner said.
Progress in the race to develop treatments and vaccines for COVID-19 have also added to the cheer. Johnson & Johnson’s Janssen unit said it would expand testing for its experimental coronavirus vaccine to Spain, the Netherlands and Germany next week.
Meanwhile, the U.S. election campaign entered its final stretch with U.S. President Donald Trump’s Republican nomination for a second term. Analysts expect market volatility to increase again ahead of voting in November.
At 9:57 a.m. ET, the Dow Jones Industrial Average was up 77.58 points, or 0.27%, at 28,569.85, the S&P 500 was up 8.77 points, or 0.25%, at 3,493.32. The Nasdaq Composite was up 63.60 points, or 0.55%, at 11,688.94.
United Airlines rose 1.9% as it prepared for the biggest pilot furloughs of its history, a day after announcing the need to cut 21% jobs this year.
Coca-Cola Co gained 0.8% as it announced plans to nearly halve its operating units and offer voluntary separation to 4,000 workers.
In the latest sign that technology companies are booming in the pandemic, business software provider Workday Inc jumped 13.2% after raising its annual subscription forecast and Dell Technologies Inc gained 6.9% after reporting a quarterly profit beat.
Advancing issues outnumbered decliners by a 2.19-to-1 ratio on the NYSE and by a 1.65-to-1 ratio on the Nasdaq.
The S&P index recorded 12 new 52-week highs and no new low, while the Nasdaq recorded 43 new highs and nine new lows.