News Column

Nasdaq lifted by biotech and internet stocks

May 20, 2014



US STOCKS rose yesterday, with a rally in high-growth names among internet and biotech shares giving the Nasdaq a gain of almost one per cent.


Equities have been pressured recently, with the S&P 500 coming off its first two-week decline since January as investors have become concerned about the economy's growth prospects.


"The listlessness in the market shows the struggle investors are having right now: Valuations are full but not stretched, and there's a lack of decisive evidence that the economy will kick into higher growth and justify these valuations," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.


High-growth "momentum" stocks were among the strongest of the day, with TripAdvisor up 5.2 per cent at $86.41 and Netflix up 4.2 per cent at $364.50. Vertex Pharma gained 3.4 per cent to $67.22.


Internet and biotech names have been among the most volatile in recent weeks, advancing on signs of economic improvement and slumping on concerns that their valuations are too hefty. The small-cap Russell 2000 index rose 1 percent after three straight declines that took it several times near correction territory, a drop of 10 percent from a recent high.


The Dow Jones industrial average advanced 20.55 points, or 0.12 per cent, to end at 16,511.86. The Standard & Poor's 500 Index gained 7.22 points, or 0.38 per cent, to finish at 1,885.08. The Nasdaq Composite Index shot up 35.23 points, or 0.86 per cent, to close at 4,125.82.


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Source: City A.M. (UK)