* Nio falls on temporary production suspension
* L Brands hits over 4-year high on forecast boost
* Dow gains 0.51%, S&P 500 rises 0.54%, Nasdaq falls 0.42%
(Adds pricings to mid-afternoon, analyst comment)
By Herbert Lash
NEW YORK, March 26 (Reuters) - The S&P 500 and Dow rose in a
broad-based advance on Friday with technology, healthcare and
financial stocks providing the biggest lift as investors bet on
a recovery that is expected to deliver the fastest economic
growth since 1984.
The S&P 500 and the Dow were poised to end a seesaw week
higher as investors rebalancing their portfolios at the end of
the quarter continued to buy stocks that stand to benefit from a
growing economy while they added some beaten-down technology
shares.
The Nasdaq fell, set for its second weekly decline in a row.
The Russell 1000 value index .RLV , which includes energy,
banks and industrial stocks, has gained more than 10% this year,
easily outperforming its counterpart the Russell 1000 growth
index .RLG , which is slightly down for the year.
While tech stocks slid, such as Tesla Inc TSLA.O ,
Amazon.com Inc AMZN.O and Google parent Alphabet Inc GOOGL.O
which all led the rally from last year's lows, Microsoft Corp
MSFT.O and Facebook Inc FB.O bucked the trend, lifting the
S&P 500 higher.
"It is less a move out of technology than a move that
evidences a broader appetite for equities to include both growth
and value," said John Stoltzfus, chief investment strategist at
Oppenheimer Asset Management in New York.
By 2:33 p.m. EDT, the Dow Jones Industrial Average .DJI
rose 166.03 points, or 0.51%, to 32,785.51. The S&P 500 .SPX
gained 21.12 points, or 0.54%, to 3,930.64 and the Nasdaq
Composite .IXIC dropped 55.01 points, or 0.42%, to 12,922.67.
L Brands LB.N jumped about 2.2% after the Victoria's
Secret owner raised its current-quarter profit forecast for the
second time this month as it benefits from consumers spending
their stimulus checks and relaxation of COVID-19 restrictions.
The Federal Reserve last week raised its GDP estimate for
2021 to 6.5% from 4.2% and many economists expect still faster
growth, which has spurred fears the economy could run too hot
and force the Fed to raise interest rates.
"It has been hard to restrain our U.S. growth forecast in
recent months. We've been upgrading our estimates almost as fast
as we lowered them a year ago," Carl Tannenbaum, chief economist
at Northern Trust, told the Reuters Global Markets Forum.
Bank stocks .SPXBK added 0.8% as the Fed said it would
lift income-based restrictions on bank dividends and share
buybacks for "most firms" in June after its next round of stress
tests. The yield on benchmark 10-year U.S. Treasury notes rose to
1.66%, lower than a spike last week to 1.75% that sparked a
selloff on inflation fears and a potential Fed rate hike -
something the Fed has pledged not to do.
The market is concerned that all of a sudden the Fed is
forced to tighten against its repeated mantra that it will not,
said Marvin Loh, a senior global macro strategist at State
Street Global Markets.
"The real concern is that things overheat and the Fed might
be forced to change its mind," he said.
Energy stocks .SPNY jumped 1.7%, tracking a boost in crude
prices after a giant container ship blocking the Suez Canal
spurred fears of a supply squeeze. O/R Nine of the 11 major S&P sectors rose with only
communication services .SPLRCL and consumer discretionary
.SPLCRD indexes in the red.
Nio Inc NIO.N slumped 9.9% as the Chinese electric vehicle
maker said it would halt production for five working days at its
Hefei plant due to a shortage in semiconductor chips.
Latest data showed U.S. consumer spending fell by the most
in 10 months in February as a cold snap gripped many parts of
the country and the boost from a second round of stimulus checks
faded, though the decline is likely temporary.
Advancing issues outnumbered declining ones on the NYSE by a
2.07-to-1 ratio; on Nasdaq, a 1.03-to-1 ratio favored advancers.
The S&P 500 posted 53 new 52-week highs and no new lows; the
Nasdaq Composite recorded 69 new highs and 49 new lows.
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Fund flows into U.S. growth and value funds https://tmsnrt.rs/3rlXPHH
Value vs Growth https://tmsnrt.rs/2PAvJes
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