Nasdaq Surges To Wipe Out All 2020 Losses in Stunning Turnaround
The Nasdaq Composite Index surged more than 1 percent on Thursday as the stock market bet on the U.S. economy reopening soon.
The index was trading over 1.6 percent higher Thursday, aided by tech companies like Apple, whose shares gained over 1 percent Thursday as well, according to CNBC.
Amazon, Alphabet Inc., Zoom Communications, Tesla, Regeneron Pharmaceuticals and Netflix also rose on Thursday, Market Watch reported.
Facebook, Amazon, Apple, Netflix and Alphabet are all up at least 15 percent this quarter.
“While we have all become even more dependent on the products and services provided by the [Facebook Amazon Apple Netflix Google Microsoft]s during the Great Virus Crisis, they might have become more immune to government regulation,” Ed Yardeni, president and chief investment strategist at Yardini Research, told CNBC.
“They have great balance sheets and generate lots of cash flow.”
Thursday’s jump would help the technology-heavy index eliminate losses it has racked up as the novel coronavirus took its toll on the stock market.
Thursday marked Nasdaq’s fourth straight advance and erased year-to-date losses that had swelled past 20 percent in March, Bloomberg reported.
“What does the new economy start to look like? To me, this makes the case for tech,” Jack Janasiewicz, a portfolio strategist at Natixis Investment Managers, said.
“Everything we think about has to revolve around technology because it has made all this stuff available for us. This just highlights the idea that we need tech and it needs to be one of the core positions in your portfolio.”
Big tech’s online focus has kept many companies up and running as employees are forced to adapt to a work from home environment.
Although big tech makes up most of the Nasdaq Composite, the index is also home to 700 health care and biotechnology companies.
“Three of the top five performers in 2020 are biotech firms, and all of them are up more than 400%, including Genprex Inc. and Vaxart Inc.,” according to Bloomberg.
Nasdaq’s rise Thursday marked the first time one of the major averages was up year to date since the coronavirus pandemic hit, CNBC reported.
The Dow Jones Industrial Average and S&P 500 were both trading higher by 1.5 percent and 1.6 percent, respectively, but are still down over 10 percent for 2020.
“I don’t think any full sector is bullet-proof to this,” Dunkin Allison, director of portfolio management at Delegate Advisors, told Bloomberg.
“Technology is in a position, given the nature of their business models, to be more defensive, experience less pain and also come out of this a fair amount stronger than they were, say, six or 12 months ago.”
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