The U.S. stock market carved out a dubious distinction on Wednesday with the Dow Jones Industrial Average finishing at an all-time high, while the Nasdaq Composite remained mired in correction territory after falling in the past few weeks by more than 10% from its record.
The Dow DJIA, +1.46% also cleared a big round-number milestone above 32,000 for the first time.
The Dow hasn’t notched a record high while the Nasdaq Composite has been in correction territory since around the time of the dot-com boom and bust on Aug. 23, 1999, according to Dow Jones Market Data.
The Nasdaq Composite COMP, -0.04% officially went into correction on Monday, when the index was down 10.54% from its record high on Feb. 12, and many market technicians view an asset as remaining in correction until it makes a new high. Dow Jones deems an asset as exiting correction when it climbs by at least 10% from its correction low-point.
The rally in the Dow has been powered by industrials Boeing Co. BA, +6.39%, drugstore chain Walgreens Boots Alliance Inc. WBA, +4.25% and home-improvement chain Home Depot HD, +1.11%, which have been benefiting from the so-called reopening trade as investors shift their focus from technology companies that did well during the pandemic to those that might perform better as the economy recovers further.
The Nasdaq has been under pressure since its record high in mid-February as the rotation out of technology and growth stocks gathered pace as bond yields rose on fears of inflation and quick economic growth in 2021 after the passage by Congress of a $ 1.9 trillion fiscal stimulus bill.
On Wednesday Congress finalized the sixth coronavirus relief bill and sent it to President Biden for his signature, with Democrats including an expansive round of payments to households, businesses and local governments without any Republican party support.
The passage of the bill helped to deliver a further boost to stocks Wednesday. The Dow Jones Industrial Average DJIA, +1.46% rose 1.46% to 32,297.02, surpassing its previous record close of 31,961.86 hit late February. The Nasdaq Composite COMP, -0.04% slipped 0.04% to 13,068.83.
Equity-market experts are expecting further rotation from Wall Street’s pandemic winners in the Nasdaq to financial services and energy shares.