While you were sleeping: Dow rises to record as tech stocks recover

Wall Street gained, pushing the Dow Jones Industrial Average to a record high, as Federal Reserve policy makers started a two-day meeting after which they are widely expected to announce an increase in interest rates.

"The expectation of a rate hike...is widely held, and has been reinforced by the most recent round of Fed communications," Michael Feroli, an economist with JP Morgan, told Reuters.

Fed chairwoman Janet Yellen will hold a press conference after the meeting ends on Wednesday.

"The accompanying statement will be the major highlight: traders will focus on any details regarding the Fed's balance sheet normalisation plans and the timing of the next rate hike," Ipek Ozkardeskaya, a market analyst at London Capital Group, wrote in a note, Bloomberg reported.

"The Fed could pause its rate-hike marathon until the end of the year, given that the Trump-reflation trend is waning and the new government's massive spending plans and fiscal reforms appear to be delayed."

Dow rises to record high
At the close of trading in New York, the Dow gained 92.80 points, or 0.44%, to 21,328.47. The Nasdaq Composite Index climbed 0.7% to 6220.37 and the Standard & Poor's 500 Index rose 0.45% to 2440.35. The Dow touched an intraday record of 21,332.77.

The Dow rose to a record high as advances in shares of Visa and Cisco, up 1.8% and 1.6% respectively, outweighed declines in shares of General Electric and Verizon, down 1.7% and 1.4% respectively.

GE shares had risen 3.5% on Monday after chief executive Jeffrey Immelt announced he would be succeeded by John Flannery on August 1.

Tech stocks stemmed their recent slide. Apple, Alphabet and Microsoft rose 0.9%, 1% and 1.4% respectively. Facebook advanced 1.7%. 

"The selloff in tech probably was a bit further than people expected, so there is some bargain hunting back into that sector," Rick Meckler, president of LibertyView Capital Management, told Reuters.

More fund managers say shares are overvalued
Meanwhile, a record 44% of fund managers polled in a monthly survey, conducted between June 2 and June 8, from Bank of America Merrill Lynch see equities as overvalued, up from 37% last month, Bloomberg reported. Even so, that doesn't mean the bull market is about to end.

"In March 2000 every waking investing individual knew the stock market was wildly overvalued but that didn't stop what was to follow," Peter Boockvar, chief market analyst at The Lindsey Group, told Bloomberg.

"In the ninth year of a bull market, things are expensive, that's what just happens in the late stages."

In Europe, the Stoxx 600 Index ended the session with a 0.6% gain from the previous close. France's CAC40 Index added 0.4%, while Germany's DAX Index rose 0.6%.

The UK's FTSE 100 Index shed 0.2% but the pound rose 0.7% after consumer prices rose the most in almost four years.

(BusinessDesk)