By Sinead Carew
NEW YORK (Reuters) – U.S. stocks rose on Monday, with the S&P 500 and the Dow Jones Industrial Average hitting record highs helped by a technology sector rebound and strength in healthcare and financial stocks.
Nasdaq’s biotechnology index rose 2.5 percent and was on track for its biggest one-day gain since February helped by stocks including Biogen Inc and Clovis Oncology while the S&P’s healthcare index hit a record high.
The S&P technology sector was up 1.4 percent after its second straight weekly decline, which was triggered by fears of stretched valuations. Tech stocks have led the S&P 500’s 9.4 percent rally this year.
“(Technology) valuations are not cheap but it doesn’t seem to be a deterrent for buyers,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia. “Investors were temporarily chased from the space but many companies in the sector offer growth which is difficult to find in the market as a whole.”
Apple rose 3.8 percent to $146.07, providing the biggest boost to technology followed by Microsoft, Alphabet and Facebook.
The financial sector was also one of the benchmark’s strongest gainers with a 0.9 percent rise after New York Federal Reserve President William Dudley, a close ally of Fed Chair Janet Yellen, said U.S. inflation was a bit low but should rise alongside wages as the labor market continues to improve, allowing the U.S. central bank to continue gradually tightening monetary policy.
Yellen’s confidence as her team raised interest rates for the third time in six months last week surprised investors who had expected more caution about the economy following a set of weak U.S. economic data.
“That was notable in supporting the financial sector which does well under the prospects of better economic conditions and a steeper yield curve,” said Luschini.
The S&P 500 bank subsector was up 1.3 percent
At 2:48 P.M. (1848 GMT), the Dow Jones Industrial Average was up 119.2 points, or 0.56 percent, to 21,503.48, the S&P 500 had gained 16.44 points, or 0.68 percent, to 2,449.59 and the Nasdaq Composite had added 74.33 points, or 1.21 percent, to 6,226.08.
Biogen shares were one of the top three S&P percentage gainers with a 3.96 percent rise to $261.71, after it was upgraded to “neutral” from “sell” at UBS, which raise its price target to $270 from $262.
Shares of Clovis Oncology were up 46.9 percent at $88 after late-stage data on its already approved ovarian cancer drug.
The S&P tech sector is trading at about 18.7 times forward earnings, compared with the historical 10-year average of 14.5, according to Thomson Reuters Datastream.
Advancing issues outnumbered declining ones on the NYSE by a 1.68-to-1 ratio; on Nasdaq, a 1.92-to-1 ratio favored advancers.
The S&P 500 posted 49 new 52-week highs and 10 new lows; the Nasdaq Composite recorded 99 new highs and 87 new lows.
(Additional reporting by Tanya Agrawal, Chuck Mikolajczak and Lewis Krauskopf; Editing by Saumyadeb Chakrabarty and James Dalgleish)