(Reuters) – The Nasdaq <.IXIC> was on track to end Thursday in positive territory for 2020 after winning back the vast majority of steep losses caused in recent months by the coronavirus pandemic.
Following a slump of almost a third between Feb. 19 and March 23, the tech-heavy index has rebounded over 30%, driven by strong gains in Amazon.com Inc <AMZN.O>, Microsoft Corp <MSFT.O> and other so called “stay-at-home” stocks.
“Everything else has been so bad that tech is now seen as a safe-haven,” said Dennis Dick, a trader at Bright Trading LLC. “It’s like we’re back in 1999, where if you had a website, you were hot. Now, if you specialize in selling online, you’re hot.”
(GRAPHIC-Nasdaq erases coronavirus losses link: https://fingfx.thomsonreuters.com/gfx/mkt/azgpomjewpd/Annotation%202020-05-07%20112416.jpg)
Thursday’s 1.5% Nasdaq rally was fueled by a nearly 14% leap in PayPal Holdings Inc <PYPL.O> after the payments processor delivered an upbeat outlook as the health crisis drives more people to shop online.
The Nasdaq was on track to end the session up about 0.1% year to date.
A surprise rise in Chinese exports raised hopes of a faster economic recovery from what is expected to be a deep coronavirus-led recession, lifting stocks across Wall Street.
The Nasdaq’s recent strong performance leaves it down about 8% from its February record high, just before fears of the coronavirus put an end to an 11-year bull market. By comparison, the S&P 500 remains down 14% from its record high, and the Dow is down 19% from its peak.
The Nasdaq has gained about 13% over the past 12 months. It has little exposure to oil stocks, which have been a drag on the S&P 500 as demand for crude evaporates due to the slump in economic activity caused by the coronavirus.
(GRAPHIC-Amazon and Microsoft fuel Nasdaq gains link: https://fingfx.thomsonreuters.com/gfx/mkt/oakveznrzpr/Amazon%20and%20Nasdaq.jpg)
With people shopping from home due to orders to remain at home and avoid stores, Amazon has surged 9% since late February. After hitting a record high a week ago, it lost ground after warning it could post a quarterly loss due to heavy spending in response to the pandemic.
Microsoft, Wall Street’s most valuable company, on Thursday rose 0.5%. It has been helped recently by increased use of its Teams chat and online meeting app and Xbox gaming services.
(Reporting by Noel Randewich; Editing by Nick Zieminski and Lisa Shumaker)
