Jan. 4 (UPI) — The Dow Jones Industrial Average hit a record high Tuesday in a mixed day of trading that saw tech stocks drag down the Nasdaq Composite.
The blue-chip Dow rose 214.59 points, or 0.59%, to a record close of 36,799.65 after also hitting an intraday record earlier in the day. The tech-heavy Nasdaq, however, dropped 1.3% and the broad S&P 500 ended the day mostly flat after also touching an intraday high, closing down 0.063%.
Movement Tuesday was largely driven by investors betting the economy will weather the recent surge in COVID-19 cases amid the presence of the Omicron variant, boosting interest rates.
“We believe there is further upside for stocks, despite a strong run so far,” JPMorgan equity strategists led by Mislav Matejka wrote in a note Tuesday. “The new variant is proving to be milder than the prior ones.”
Bank stocks benefitted from the rising rates to lead the gains in the dow as JPMorgan Chase, American Express and Goldman Sachs each rose more than 3%.
Stocks linked to economic recovery were on the rise with Occidental Petroleum gaining 7.47%, Coterra Energy increasing 6.95% and Halliburton climbing 6%.
Ford stock led the S&P 500, rising 11.67% after the automaker announced it planned to nearly double production of its all-electric F-150 Lightning to 150,000 trucks per year to meet high demand.
Toyota shares also gained 6.92% after replacing General Motors as the top-selling automaker in the United States in 2021.
Conversely, high valuation tech stocks suffered with Apple stock falling 1.27% after rising to become the first publicly traded company with a $3 trillion valuation on Monday.
Tesla, which has a market cap of about $1.2 trillion, fell 4.18%, after rising 13.53% on Monday.
Jim Bianco of Bianco Research firm told Yahoo Finance potential interest rate hikes from the Federal Reserve present “the number one risk” to the market to start 2022, adding that high inflation is likely to be persistent and could push the central bank to act.
“In the process of doing something about it, it puts the rally of the stock market at risk,” Bianco said.