Big Tech leads stocks higher as Fed Chairman Powell testifies on coronavirus recovery

By Jonathan Garber FOXBusiness

Tesla will hold its Battery Day event on Tuesday evening.

U.S. equity markets rallied Tuesday morning as traders awaited testimony from Federal Reserve Chairman Jerome Powell amid growing concerns of a new wave of coronavirus infections in Europe.

The Dow Jones Industrial Average gained 37 points, or 0.14%, in the opening minutes of trading while the S&P 500 and the Nasdaq Composite were up 0.51% and 0.8%, respectively. The early advance has the major averages on track to snap their four-day losing streak.

Powell is set to testify before the House Financial Services Committee on the improving state of the U.S. economy and will reiterate the central bank is willing to provide support “for as long as it takes.”

As the U.S. economic recovery forges ahead, investors are paying close attention to developments in the U.K., where Prime Minister Boris Johnson ordered bars and restaurants to close at 10 p.m. to help slow the spread of the virus. The U.K. and other countries in the region have recently seen a spike in new infections.

Looking at stocks, Amazon Inc. was upgraded to “outperform” at Bernstein, which says the e-commerce giant will continue to gain market share as the COVID-19 pandemic has “pulled forward secular trends.” The firm believes the 16% drop that has occurred over the past three weeks has made shares attractive.

Other mega-cap tech names, including Alphabet Inc., Apple Inc. and Microsoft Corp. were also trading higher.

Meanwhile, Tesla Inc. CEO Elon Musk dialed down expectations ahead of the electric-car maker’s Battery Day Event, tweeting that whatever is announced “will not reach serious high-volume production until 2022.”

Nikola Corp. shareholders plan to sell 249.8 million shares through a secondary offering, according to U.S. Securities and Exchange Commission filing. The announcement comes a day after founder Trevor Milton stepped down as executive chairman.

Elsewhere, top GameStop Corp. investor RC Ventures raised its stake in the videogame retailer to 9.98%, up from 9.6%. The firm has expressed an interest in becoming more involved with the company and has the goal of making it a competitor to Amazon, Bloomberg reported, citing a person familiar with the matter.

Looking at earnings, AutoZone Inc. reported earnings and revenue that outpaced expectations as same-store sales rose 21.8% year-over-year, more than double forecasts.

Looking at commodities, West Texas Intermediate crude oil ticked up 29 cents to $39.60 a barrel while gold added $1.40 to $1,912 an ounce.

U.S. Treasuries were little changed with the yield on the 10-year note holding near 0.675%.

European markets were trading higher across the board with Germany’s DAX up 1.14%, France’s CAC advancing 0.68% and Britain’s FTSE adding 0.46%.

In Asia, China’s Shanghai Composite fell 1.29% and Hong Kong’s Hang Seng lost 0.98%. Japan’s Nikkei remained closed for holiday.

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