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Dow Loses Some Steam But Holds Near Record High as Bulls Back Cyclicals

Stock MarketsMay 06, 2021 03:21PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The Dow remained near a record high Thursday, as cyclicals continued to ride the economic optimism as jobless claims fell sharply, while tech struggled for direction amid ongoing fears of inflation.

The Dow Jones Industrial Average rose 0.46%, or 158 points, and had hit an intraday record of 34,448.43, the S&P 500 was up 0.23%, and the Nasdaq Composite was down 0.1%.

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 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 2% 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, was higher in choppy trade, though sentiment continued to be 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 Loses Some Steam But Holds Near Record High as Bulls Back Cyclicals
 

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Comments (5)
Dave Jones
Dave Jones May 06, 2021 3:28PM ET
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wow we're all going to be uber drivers at this rate.
Mitchel Pioneer
Mitchel Pioneer May 06, 2021 3:24PM ET
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"In aggregate companies are reporting earnings 22.9% above expectations."  As predicted, a flagrant, fraudulent set-up for another round of "beat" the criminally rigged, low-ball "estimate".
Dave Jones
Dave Jones May 06, 2021 3:24PM ET
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everything seems to be doing so well since they discovered the free money
Shiwoah Lulz
Shiwoah Lulz May 06, 2021 3:24PM ET
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It isnt an https://investing.com article if Mitchel Pioneer doesn’t complain about the system in the comments. Just buy stocks/call options and stop whining
Jacob Steinschlag
Jacob Steinschlag May 06, 2021 3:09PM ET
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These are great hedges against inflation, so it makes sense to be taking some of your money and repositioning to cyclicals," Darren Schuringa, CEO of ASYMmetric ETFs said in an interview with Investing.com earlier this week. "Tech has had its day in the sun, [producing] a lot of wealth for investors through COVID and over the last decade, which has been led by tech." ROFL. Enter right at the top. And then being left as bagholders when market rotates back to growth.
Stan Smith
Stan Smith May 06, 2021 2:13PM ET
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Hmmm...all is not as it appears...you need bag holders though I'll give you that!
Sloppy Joe
Sloppy Joe May 06, 2021 2:11PM ET
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we want vaccine optimism and stimulus hopes come on !!!
 
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