U.S. equities and stock exchange traded funds climbed Wednesday on optimism over quarterly earnings, with the healthcare and technology sectors bolstering broad market gains.
Healthcare companies in the S&P 500 were among the best performers, rising 0.7% Wednesday. Meanwhile, tech companies in the S&P 500 gained 0.6%.
Crit Thomas, global market strategist at Touchstone Investments, argued that the healthcare sector seems to have brushed off the recent failure of Senate Republicans in replacing the Affordable Care Act, or so-called Obamacare, the Wall Street Journal reports.
Market observers also gauged the health-care bill’s progress as a litmus test for the likelihood of Congress passing corporate-friendly, pro-growth policies later in the year.
“There’s still the anticipation that even if health care can’t get done, tax reform is still something that can,” Thomas said. “I’m not as convinced on that.”
Meanwhile, technology stocks have pared its previous losses over the past month and were on pace to close above their all-time high set back in March 2000 at the peak of the dotcom boom. The S&P 500 technology sector remains the best performing area of the market this year despite concerns over stretched valuations as many look for growth sectors immune to policy concerns.
“At least in the second quarter and for the next quarter technology is the only sector that will see double-digit growth,” Tom Cassidy, chief investment officer at Univest Wealth Management Division, told Reuters. “If you look at the sector, it isn’t all that overvalued compared to the broader S&P index, except for a few names.”
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