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Dow Closes at Record High as Cyclicals Rally Ahead of April Jobs Report

Stock MarketsMay 06, 2021 04:06PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The Dow closed at record highs Thursday as cyclicals continued to ride economic optimism after jobless claims fell sharply, while tech cut losses into the close ahead of the April jobs report due Friday. 

The Dow Jones Industrial Average rose 0.92%, or 141 points, and had hit an intraday record of 34,546.10, the S&P 500 was up 0.81%, and the Nasdaq Composite was up 0.37%.

The number of people filing for unemployment dropped by 92,000 to 498,000 people in the week ended May 1, topping economists' forecast for a drop to 540,000. That was the lowest level of claims since March 2020.

"Given the tightness of the labor market, as reported in business surveys, we expect claims to fall for the foreseeable future, with sub-300K a reasonable objective for the summer," Pantheon Macroeconomics said.

The data about the fall in jobless claims comes just a day ahead of the crucial nonfarm payrolls due Friday. Analyst expect the economy created about 978,000 jobs last month.  

Consumer staples were among the best performing sectors during the day following a 7% rally in Kellogg (NYSE:K) as the Special K and Pringles owner raised its full-year guidance after "strong" Q1 results.

"This strong start to the year enables us to raise our full-year financial outlook, and underscores confidence in our ability to sustain balanced financial delivery," Kellogg said.

Gains in Molson Coors (NYSE:TAP), Kroger (NYSE:KR), General Mills (NYSE:GIS) also pushed consumer staples higher.

PayPal (NASDAQ:PYPL), meanwhile, reported performance that topped Wall Street estimates on both the top and bottom line. The online payments company also touted an upcoming digital wallet as it looks to capitalize on the increasing cryptocurrency demand.

Moderna (NASDAQ:MRNA) fell 1.5% after it reported mixed first-quarter results as revenue fell short of estimates. The drug maker lifted its forecast for its Covid-19 vaccine sales by 4.3%, to $19.2 billion.

Tech, meanwhile, closed higher in choppy trade, though sentiment remains skittish somewhat amid fears rising inflation could force the Federal Reserve to tightened monetary policy sooner than expected.

Google-parent Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), Facebook (NASDAQ:FB), Amazon.com (NASDAQ:AMZN) and Apple (NASDAQ:AAPL), the so-called Fab 5, traded in the green.

Still, with signs that inflation continues to heat up, Wall Street continues to back cyclicals as the corner of the market that will advance as the economy continues to expand.

"Tech has had its day in the sun, [producing] a lot of wealth for investors through COVID and over the last decade," Darren Schuringa, CEO of ASYMmetric ETFs said in an interview with Investing.com earlier this week. "These [cyclicals] are great hedges against inflation, so it makes sense to be taking some of your money and repositioning."

Dow Closes at Record High as Cyclicals Rally Ahead of April Jobs Report
 

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Comments (5)
Charles Edwards
Charles Edwards May 06, 2021 6:57PM ET
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This stock market rally funded by the middle class.
Atlantic Coast Money
Atlantic Coast Money May 06, 2021 6:21PM ET
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Jobs whisper number is over 1 million. Should send inflation and yields through the roof. Lets get this correction going. Yeehaw 🤠
Dave Jones
Dave Jones May 06, 2021 5:41PM ET
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everything is awesome?
Mitchel Pioneer
Mitchel Pioneer May 06, 2021 4:56PM ET
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The fraud goes pedal to the metal in the US Ponzi Scheme, biggest investment farce in the world.
Dave Jones
Dave Jones May 06, 2021 4:56PM ET
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Buy physical silver Mitchel and thank me later
Patrick Joly
Patrick Joly May 06, 2021 4:56PM ET
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Michel Pionner, at least, tell me that you cut and paste your comment every day.
Brett Ward
Brett Ward May 06, 2021 4:56PM ET
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please elaborate.....just a little if you don't mind
Sloppy Joe
Sloppy Joe May 06, 2021 4:38PM ET
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money printing rules
franklin neversoy
franklin neversoy May 06, 2021 4:38PM ET
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At least they waited with comments until after markets closed
Shahbaz Akram
Shahbaz Akram May 06, 2021 4:38PM ET
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hlw
 
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