By Geoffrey Smith
Investing.com -- U.S. stock markets opened higher again on Tuesday, as faith in the growth narrative underpinning the rally in tech stocks withstood the pressure of its first serious correction in months.
That faith was expressed in strong demand for two software IPOs which are due to price later Tuesday, those of Snowflake and JFrog. Both raised their marketing ranges on Monday and Snowflake is now set to come to market with a valuation of some $30 billion.
The market was unfazed by data showing that the rebound in industrial production in the U.S. petered out in August, rising only 0.4%, its weakest rise in four months. July's gain was revised up to 3.5% from 3.0% at the same time. Redbook Research's monthly survey of the retail sector also showed a slight deterioration in conditions in August. Together, the data point to a modest weakening of the economy as the Federal Reserve prepares to begin its regular two-day policy meeting.
By 9:40 AM ET (1340 GMT), the Dow Jones Industrial Average was up 126 points, or 0.5%, at 28,119 points. The S&P 500 was up 0.9% and the Nasdaq Composite was back to its habit of outperforming, with a rise of 1.5%.
The army of retail investors that has driven this summer's rally appeared to have seen last week's sell-off as little more than a dip to be bought, especially through the options market. Goldman Sachs (NYSE:GS) analysts pointed out that the open interest in single stock call options was now equal to that in index put options, something unprecedented in at least the last 10 years.
The fresh pile-on in tech megacaps added 4.9% to Tesla (NASDAQ:TSLA) stock, 2.3% to Apple (NASDAQ:AAPL) stock and 1.8% to Amazon (NASDAQ:AMZN) stock, with little or no news flow behind any of the moves. Amazon, at least, remained well supported by reports on Monday of it hiring another 100,000 workers across North America.
Elsewhere, DraftKings continued to post new all-time highs after announcing its groundbreaking partnership with Disney-owned ESPN on Monday. DraftKings (NASDAQ:DKNG) stock was up 1.4%, while Caesars Entertainment (NASDAQ:CZR) stock and William Hill (OTC:WIMHY)ADRs, the two other names included in the 'co-exclusivity' deal with ESPN, were up 0.9% and 4.6% respectively.
Another stock to hit an all-time high was Nextera Energy (NYSE:NEE), which announced a four-for-one stock split after the close on Monday. The renewable power company's decision comes at a time when raging forest fires along the Pacific coast have again inflamed the debate over Climate Change, with both presidential candidates chiming in in unsurprising fashion on Monday.