US STOCKS-Nasdaq rallies while S&P 500 registers biggest August gain since 1986

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By Sinéad Carew
NEW YORK, Aug 31 (Reuters) - While the S&P boasted its
steepest August percentage gain in more than three decades it
ended Monday lower as investors took a pause although the Nasdaq
rallied thanks to high-flying stocks including Apple Inc
AAPL.O .
The Federal Reserve's commitment to tolerate inflation and
keep interest rates low, positive developments in vaccines and
treatments for COVID-19 and a rally in tech-focused stocks have
helped the S&P 500 and Nasdaq hit record highs in August.
But while states such as New Jersey continued to ease
restrictions on Monday, investors noted that across the United
States, total coronavirus cases topped 6 million on Sunday as
many states in the Midwest reported increasing infections,
according to a Reuters tally. "It's a momentum trade. People are flooding to the
technology companies they think will do well regardless of the
pandemic," said Chris Zaccarelli, chief investment officer,
Independent Advisor Alliance.
"The U.S. just passed 6 million cases, a further reminder
that the pandemic is here to stay until we do something about
it. Clearly it has an impact on all businesses but some are more
pandemic resistant," he said.
Unofficially, the Dow Jones Industrial Average .DJI fell
230.01 points, or 0.8%, to 28,423.86, the S&P 500 .SPX lost
8.11 points, or 0.23%, to 3,499.9 and the Nasdaq Composite
.IXIC added 79.82 points, or 0.68%, to 11,775.46.
With the S&P trading more than 3% above its pre-crisis,
February record, Mona Mahajan, senior U.S. investment strategist
at Allianz Global Investors in New York, said investors were
showing some caution by favoring technology as they looked
warily at U.S. and overseas COVID-19 numbers.
"After such a strong summer run we're reverting back to the
old pandemic playbook so we see tech outperforming," she said.
"Really that's a defensive move as people think about
stay-at-home more as we're heading toward that fall season."
Nasdaq meanwhile traded more than 20% above its pre-crisis
high. Its top two boosts were from Apple Inc AAPL.O and Tesla
Inc TSLA.O which after their stock splits. While the splits did not provide a fundamental reason to buy
the stocks, Mahajan noted that the lower prices may be making
the stocks more attractive to some retail investors.
The S&P ended the month with a gain of more than 7%, its
biggest gain for August since 1986 when it gained when it rose
7.1% for that month.
But more than half of the S&P's 505 constituents were still
in the red year-to-date.
The three main indexes showed their fifth straight monthly
rise following March lows, even as economic data pointed to an
uneven recovery from the steep downturn.
For the S&P, this was its longest winning steak on a
monthly basis since a 6-month run from April to September 2018.
Aimmune Therapeutics Inc 's AIMT.O shares soared after
Swiss food group Nestle SA NESN.S offered to pay $2 billion
for full ownership of the peanut allergy treatment maker.
Shares of Microsoft Corp MSFT.O , Walmart Inc WMT.N and
Oracle Corp ORCL.N - all suitors for TikTok's U.S. assets -
fell as China's new rules around tech exports meant a deal with
TikTok owner ByteDance could need Beijing's approval.