The Nasdaq 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 <AMZN.O>, Microsoft <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.”
Thursday’s 1.7% Nasdaq rally was fueled by a nearly 13% leap in PayPal Holdings <PYPL.O> after the payments processor delivered an upbeat outlook as the health crisis drives more people to shop online.
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 old 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 13% over the past 12 months. The Nasdaq index 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.
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 0.8%. It has been helped recently by increased use of its Teams chat and online meeting app and Xbox gaming services.