By Yasin Ebrahim
Investing.com – The Dow hit a record high on Wednesday, as cyclicals continued to shine on the bets over a stronger economic recovery, while rising chip stocks boosted tech.
The Dow Jones Industrial Average rose 1.4%, or 441 points hitting a record high of 31,978.90. The S&P 500 was up 1.15%, while the Nasdaq Composite gained 0.86%.
Energy, up more 3%, led the move higher in cyclical stocks as oil prices shrugged off an unexpected build in the crude stockpiles on expectations of a boost to demand from a stronger recovery.
Crude inventories increased 1.28 million barrels last week, compared with analysts' expectations for a draw of 5.19 million barrels. The move coincided with a draw in gasoline and distillate stocks as refinery activity slowed during the recent cold snap that battered oil-rich Texas.
Marathon Oil (NYSE:MRO), EOG Resources (NYSE:EOG) and Occidental Petroleum (NYSE:OXY) were among the biggest gainers, with the latter up 9%.
Forecasting above above-consensus economic growth in 2021, Goldman Sachs (NYSE:GS) said performance "would benefit from improved growth expectations and a continued rotation into economically-sensitive cyclical equities."
Industrials were also firmer, with airlines leading to the upside on expectations for a surge in travel demand when the economy full reopens and further fiscal support to the aviation industry.
United Airlines Holdings (NASDAQ:UAL) rose 8%, while Boeing (NYSE:BA) was up 6%, and American Airlines (NASDAQ:AAL) up 5% on the day.
Positive vaccine news also added to the bullish bets on stocks as the Food and Drug Administration said Johnson & Johnson (NYSE:JNJ)'s single shot Covid-19 vaccine was safe and effective ahead of vote later this week on whether to grant emergency use authorization, with doses expected to roll out next week.
Tech stocks, which have been abandoned on fears about rising inflation, found some reprieve amid a jump in chip stocks ahead of Nvidia (NASDAQ:NVDA)'s quarterly results due later.
But big tech remained sluggish as Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT) remained in the red, while Amazon.com (NASDAQ:AMZN), Facebook (NASDAQ:FB) and Alphabet (NASDAQ:GOOGL) were higher.
Tesla (NASDAQ:TSLA), meanwhile, pared some its losses from a day earlier, up about 7% after Ark investment manager Cathie Wood revealed she had bought $120 worth of the electric automaker's shares following a rout on Tuesday.
In other news, Square (NYSE:SQ) fell 5% as the payments company's better-than-expected were overshadowed by weaker performance in its subscription and services business and slowing growth in its cash app despite a boost from bitcoin trading.
"Bitcoin trading strength offset an unusual miss in [Square's] subscription and services based adjusted revenues, Wedbush said. [As] expected, CashApp's year-on-year growth (127%) decelerated from the prior quarter's 174% level, while other relevant metrics (GPV, transaction revenue, and transaction margin) were slightly below expectations."