Tech Stocks on Cusp of Record as Earnings, Trump Provide Relief

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(Bloomberg) -- Technology stocks are on the verge of surpassing March’s record closing high amid signs of cooling trade tensions between the U.S and China and the wind-down of an earnings season that helped soothe investors rattled by privacy scandals and antitrust threats.

President Donald Trump’s reversal on ZTE Corp. and renewed trade talks with China helped send the S&P 500 Information Technology Index up as much as 0.7 percent Monday. That briefly pushed the index of 69 large-cap technology companies above the March 12 closing record of 1,233.97.

The gains are remarkable considering that last month tech titans including Facebook and Apple Inc. were being blamed for a market selloff that caused the S&P 500 index to close below its 200-day moving average for the first time since 2016.

The tech gauge has rallied almost 6 percent since Netflix Inc. kicked off the first-quarter earnings season on April 16 with subscriber gains that exceeded even the highest analyst estimates. Stellar results from Amazon.com Inc. and Facebook Inc. followed, quelling concerns after privacy scandals, antitrust threats and market volatility shook confidence. Tech stocks have led all other sectors in the S&P 500 with an 11 percent return in 2018.

While most tech bellwethers have already reported, investors will get additional data this week from networking giant Cisco Systems Inc. and Applied Materials Inc., the biggest supplier of machinery used to produce semiconductors. Cisco reports on Wednesday and Applied Materials on Thursday.

©2018 Bloomberg L.P.

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