(Reuters) – The S&P 500 rallied for the seventh straight session on Friday, powered by tech stocks, prospects of super-low interest rates for a prolonged period and hopes of a medical solution to the COVID-19 pandemic.
The tech sector’s 0.6% rise provided the biggest boost to the benchmark index. Energy stocks advanced 1.1% as Hurricane Laura passed the heart of the U.S. oil industry in Louisiana and Texas without causing any widespread damage to refineries.
“Technology has kind of become the recession play. With everybody piling in into it, the momentum is certainly on technology’s side,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.
“Equity markets are in kind of a risk on trade. It’s a recognition that the Fed is probably not going to be touching interest rates for quite some time.”
Data on Friday showed U.S. consumer spending increased more than expected in July, though momentum is likely to ebb as the pandemic lingers and fiscal stimulus dries up.
The core PCE index, the Federal Reserve’s preferred inflation measure, increased 1.3% in the 12 months through July, closer to the central bank’s 2% target which is now a flexible average.
The Fed on Thursday unveiled a plan to support inflation and restore the U.S. economy from its biggest downturn since the Great Depression, helping the S&P 500 and the Nasdaq scale record highs.
The benchmark index 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 its break-even level for 2020.
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 12:45 p.m. ET, the Dow Jones Industrial Average was up 124.21 points, or 0.44%, at 28,616.48, the S&P 500 was up 10.82 points, or 0.31%, at 3,495.37. The Nasdaq Composite was up 43.94 points, or 0.38%, at 11,669.28.
Coca-Cola Co gained 2.4% as 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 12.2% after raising its annual subscription forecast and Dell Technologies Inc gained 5.9% after reporting a quarterly profit beat.
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Nutanix Inc jumped 28.1% after its quarterly results beat and Bain Capital invested about $750 million in the cloud service provider.
Advancing issues outnumbered decliners by a 1.79-to-1 ratio on the NYSE and by a 1.45-to-1 ratio on the Nasdaq.
The S&P index recorded 18 new 52-week highs and no new low, while the Nasdaq recorded 63 new highs and 13 new lows.
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