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  • The Dow hit a record high yesterday after mild U.S. consumer price data for February calmed inflation worries
  • Funds are being moved from tech companies with lofty valuations to stocks in other groups expected to do well with a re-opening economy
  • Apple, Amazon, Facebook, Tesla and Microsoft — which all fell yesterday — have been weighed down by rising yields, since they rely on cheap funding for growth
  • The Dow’s strong performance was also buoyed by a massive US$1.9 trillion (roughly A$2.5 trillion) COVID-19 relief bill that received final approval from the U.S. House of Representatives
  • The Dow Jones Industrial Average rose 1.46 per cent, while the S&P 500 climbed 0.6 per cent and the NASDAQ fell 0.04 per cent

The Dow hit a record high yesterday after mild U.S. consumer price data for February calmed inflation worries.

An emphasis on the energy and financial sectors continued, both in small and large-cap stocks, as investors placed their bets on increased consumer spending that would come with a re-opening economy.

Funds are being moved from tech companies with lofty valuations to stocks in other groups that are considered undervalued and more of a play in a post-COVID world than big tech is, said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

“It is occurring in fits and starts,” he added. “That is essentially the overwhelming theme in the market right now and it probably will continue until these things run their course.”

Tech stocks like Apple, Amazon, Facebook, Tesla and Microsoft — which all fell yesterday — have been weighed down by rising yields, since they rely on cheap funding for growth.

The Dow’s strong performance was also buoyed by a massive US$1.9 trillion (roughly A$2.5 trillion) COVID-19 relief bill that received final approval from the U.S. House of Representatives, representing President Joe Biden’s first major victory in office.

It’s thought that some of the US$1400 (roughly A$1811) payments heading to most Americans will end up on the stock market, which could provide a boost for companies popular among retail investors on social media, like GameStop.

Volume on U.S. exchanges reached 13.82 billion shares, compared with a daily average of just over 15 billion for the last 20 trading days.

The Dow Jones Industrial Average rose 1.46 per cent, while the S&P 500 climbed 0.6 per cent and the NASDAQ fell 0.04 per cent.

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