Stocks – Wall Street Opens Higher as Tech Feeding Frenzy Continues; NASDAQ up 1.3%

This post was originally published on this site — U.S. stock markets opened higher on Monday, as the feeding frenzy in tech stocks pushed the Nasdaq Composite to yet another record high, despite continuing signs that the coronavirus pandemic threatens to lurch completely out of control in the U.S.

By 9:40 AM ET (1340 GMT), the NASDAQ Composite was up 1.2% at 10,745 points. The Dow Jones Industrial Average and S&P 500 were both up 0.8%, the Dow posting a gain of 208 points to 26,279.

Tesla (NASDAQ:TSLA) stock – again – was at the center of some of the most intense buying, rising 11.3% to another new record on speculation that another quarter of profitability will see it included in the S&P 500, forcing all the passively-managed funds benchmarked to the index into buying it. S&P regularly rebalances its index, and Tesla is clearly the biggest stock in the U.S. not included in it, but four straight quarters of profits is only one of many criteria the index provider insists on.

Tesla has now rallied 83% in the last month alone, mainly on the back of such speculation, which is taking place increasingly through the options market. However, the company is still having to discount sharply to shift inventory: it announced a 6% cut in the price of its new Model Y crossover at the weekend, only three months after debuting the model.

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