Stocks End Higher, Pushing S&P 500 To Another All-Time High | New
Stocks weathered a midday drop on Wall Street to close broadly higher on Thursday, leading the S&P 500 to another record high.
The benchmark index rose 0.7% after declining 0.2% previously. Associated communications helped fuel a large chunk of the gain, thanks to a sharp increase in Facebook following the company’s latest quarterly report. Banks also helped lead the rally, offsetting the decline in healthcare and tech stocks. Treasury yields have been mixed.
Investors weighed in on the latest batch of corporate earnings reports and encouraging economic data. A report showing that the US economy grew strongly in the first quarter is among the latest data indicating an economic recovery from the recession caused by the pandemic. Other bullish reports included data showing more Americans were signing home purchase contracts in March after two months of declines.
“We are experiencing a strong economic recovery that is translating into a strong earnings environment for businesses,” said Bill Northey, senior director of investments at US Bank Wealth Management.
The S&P 500 Index rose 28.29 points to 4,211.47. The index also hit an all-time high on Monday. The Dow Jones Industrial Average added 239.98 points, or 0.7%, to 34,060.36, while the Nasdaq gained 31.52 points, or 0.2%, to 14,082.55. Both indexes were also in the red earlier today.
Smaller company stocks, which have outperformed the market as a whole this year, have returned some of their recent gains. The Russell 2000 Index lost 8.70 points, or 0.4%, to 2,295.46.
The rollout of COVID-19 vaccinations, massive support from the U.S. government and the Fed, and increasingly positive economic data have fueled expectations of a strong economic rebound and strong growth in the economy. corporate profits this year. This has helped stocks move higher and keep indexes near all-time highs.
Still, some of the big risks to the market include rising inflation getting out of hand and any aspect of the viral pandemic getting worse and disrupting the economic recovery, said Keith Buchanan, senior portfolio manager at Globalt Investments.
“Without one of these two, the macroeconomic direction seems clear,” he said.
So far, corporate profits for the first three months of the year have largely exceeded Wall Street expectations and are fueling the bullish earnings outlook for 2021.
Facebook jumped 7.3% after the social media giant reported stronger-than-expected results for the first quarter thanks to surging ad revenue.
It follows an overnight dose of big tech payoffs from Apple, Qualcomm, and others. Tech stocks led much of the rally in 2020 and are still highly regarded by investors, who are betting the pandemic has permanently altered the way Americans shop and have fun.
Amazon.com reported after the close of regular trading that its profit more than tripled in the first quarter. Its shares jumped 4.2% after hours.
Automakers fell sharply after Ford warned that a worsening global computer chip shortage could cut production in half in the current quarter. Ford fell 9.4% and General Motors fell 3.4%.
Rideshare and delivery service companies have also plummeted following a report that Labor Secretary Marty Walsh wants construction workers classified as employees. DoorDash fell 7.6%, Uber lost 6%, and Lyft fell 9.9%.
Economically, the Commerce Department said the US economy grew at a steady 6.4% annual rate in the last quarter. This acceleration is expected to increase throughout the summer as more vaccinations are administered and COVID-19 cases continue to decline. Meanwhile, the Department of Labor said the number of Americans who applied for unemployment benefits fell again last week.
In his Wednesday night speech, President Joe Biden ticked off details of some of his $ 1.8 trillion spending plans to expand preschool education, create a national family and medical leave program, distribute grants for child care and more.
The plan comes on top of his $ 2.3 trillion spending proposal to rebuild roads and bridges, expand broadband access, and launch other infrastructure projects.
The good economic reports helped push up some bond yields. The yield on the 10-year Treasury bill rose to 1.64% against 1.62% the day before.
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