Stocks – Nasdaq Notches Record on Tesla's Surge Higher

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By Yasin Ebrahim – The Nasdaq closed at record highs Tuesday, led by a surge in shares of Tesla (NASDAQ:) as the electric automaker continued its drive higher following its upbeat results last week showing record deliveries.

The S&P 500 rose 1.5% to close at a record high, while the surged 2.10% to a record. The gained 1.44%.

Tesla was soaring, but saw sharp selling just before the close. There were unconfirmed rumors of a seondary offering, but shares still ended the day 15% higher. Shares have been on fire this week, with rises showing the hallmarks of a short-covering rally.

“(M)any have attributed the ascent to short-sellers who bet against the stock and may have to cover their positions as Tesla stock leaps higher,” Wedbush said in a note. “Half of what we’ve seen is just a historic short-covering rally for the ages. That’s put gasoline on the fire for the Tesla (NASDAQ:) bull story.”

Tesla regained its position as the most-shorted stock in the U.S. at the end of January, according to data from financial-analytics firm S3 Partners.

The broader market, meanwhile, was also lifted by growing expectations that central banks will act should the outbreak of the coronavirus intensify and threaten global growth.

China introduced stimulus measures for a second-straight day in a bid to steady business lending following the rapid spread of the virus, which has killed 400 people and infected more than 20,000.

For weeks, the rapid spread of the virus had raised worries that the death toll could pick up pace, but new information suggests the death rate is not as bad as initially feared.

The coronavirus death rate was 2.1%, lower than SARS’ 9.6%, according to China’s National Health Commission.

Google-parent Alphabet (NASDAQ:), however, failed to join on the rally, falling 2.5%, pressured by its mixed quarterly report.

Ralph Lauren (NYSE:) jumped 9% after it topped quarterly results as price hikes for its winterwear collection boosted margins.

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