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Strong economic data lifts Dow, S&P 500 to record closes

Stock MarketsApr 05, 2021 04:15PM ET
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© Reuters. FILE PHOTO: A U.S. flag flies outside The Federal Reserve Bank of New York in New York

By Chuck Mikolajczak

NEW YORK (Reuters) -U.S. stocks rallied on Monday with the Dow and S&P 500 closing at record levels, as a round of strong economic data buoyed investor optimism for the economic reopening and a muted climb in the 10-year U.S. Treasury yield kept inflation worries in check.

An ISM survey for March showed a measure of U.S. services industry activity jumped to a record high. The data followed Friday's report showing U.S. nonfarm payrolls surged by 916,000 jobs in March, trouncing forecasts.

Investors have bet on cyclical sectors poised to lead an economic reopening, with energy, financials and materials among the best performing on the year. A climbing yield on the 10-year U.S. Treasury note has dented appetite for technology stocks.

Despite strong economic data, gains were led by sectors that have underperformed recently, including communication services, consumer discretionary and tech, as the 10-year yield remained below a 14-month high hit last week.

"Part of today is yields aren’t moving and that is helping tech, there is at least some rotation going back into tech by somebody that is helping the sector," said Tim Ghriskey, Chief Investment Strategist at Inverness Counsel in New York, New York.

"At some point the cyclical move is discounted, these stocks, a lot of them had big moves and are valued above where they were in early February of 2020."

The Dow Jones Industrial Average rose 373.98 points, or 1.13%, to 33,527.19, the S&P 500 gained 58.04 points, or 1.44%, to 4,077.91 and the Nasdaq Composite added 225.49 points, or 1.67%, to 13,705.59.

With speedy vaccinations and additional government stimulus helping the S&P 500 and the Dow clinch all-time highs, focus turns to progress on a massive infrastructure plan and the upcoming corporate earnings season.

The tech-heavy Nasdaq is still about 3% below its February high as the recent spike in bond yields spurred inflation concerns and made growth stocks less attractive. But rising COVID-19 cases and resumed lockdowns in countries such as France recently have helped the appeal of tech names of late.

Energy shares closed 2.4% lower, as the sole decliner among major S&P sectors, following a sharp drop in oil prices. Reopening plays gained, as the S&P 1500 airlines index jumped 2.54% after the U.S. Centers for Disease Control and Prevention said fully vaccinated people can safely travel at "low risk." The agency had held off for weeks on revising guidance that discouraged all non-essential trips.

U.S. Treasury Secretary Janet Yellen said she was working with G20 countries to agree on a global corporate minimum tax rate to end a "30-year race to the bottom on corporate tax rates."

Tesla (NASDAQ:TSLA) Inc shares climbed 4.43% as one of the biggest boosts to the S&P after the world's most valuable automaker posted record deliveries.

Volume on U.S. exchanges was 10.05 billion shares, compared with the 12.62 billion average for the full session over the last 20 trading days.

Advancing issues outnumbered declining ones on the NYSE by a 1.79-to-1 ratio; on Nasdaq, a 1.50-to-1 ratio favored advancers.

The S&P 500 posted 85 new 52-week highs and no new lows; the Nasdaq Composite recorded 164 new highs and 16 new lows.

Strong economic data lifts Dow, S&P 500 to record closes
 

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Comments (15)
zz zz
zz zz Apr 06, 2021 1:54AM ET
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https://www.investopedia.com/articles/stocks/10/5-steps-of-a-bubble.asp#:~:text=key%20takeaways&text=The%20five%20steps%20in%20the,profit%2Dtaking%2C%20and%20panic.
d5hin1990 .
d5hin1990 . Apr 05, 2021 10:08PM ET
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Stocks are way under valued. Sp500 should be around 4500 to 4600 by now we will close out close to 4900-5000end if year. So much stimulus passed with 2 trillion more on construcion bill, intrest rate 0-0.25, montly bond purchase by fed. Strong job reports, encomy opening on the way. There nothing but great news. I dont see how there is no more upside i been saying 4000 soon i was wrong i should be saying 5000 soon. And lets be clear this is nothing like 2000 or 2008 both are caused by private sectors. This strong rally is fully supported by the fed there will be no down side only higher high and no new low. We just finished with a correction/derpession so its another 8-10 year rally from here
Joel Schwartz
Joel Schwartz Apr 05, 2021 5:04PM ET
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If the economy is so strong, the FED could raise interest rates. Who writes this garbage?
Dave Jones
Dave Jones Apr 05, 2021 5:04PM ET
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If the economy was strong they could do a lot like stop QE. Stop repo. Pay off the national debt. Reduce the balance sheet as well as normalize interest rates.The fact is they can't do a single one of these without total collapse. but their blackvan buddies control the printer so they'll be sweet.
Joel Schwartz
Joel Schwartz Apr 05, 2021 5:04PM ET
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Dave Jones It’s like a kid who keeps taking out new credit cards to pay off old ones. Infinite money loop!
Dave Jones
Dave Jones Apr 05, 2021 12:37PM ET
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take away the trough
Casador Del Oso
Casador Del Oso Apr 05, 2021 12:16PM ET
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once the business income tax increases are implemented I will be loading up on XOUT once the SP500 hits 2200.
Jimmy Kim
Jimmy Kim Apr 05, 2021 11:34AM ET
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So why we need stimulus and expansion?
Mir Chang
Mir Chang Apr 05, 2021 11:34AM ET
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Record low interest rate why not inject stimulus and lower QE?
perplexed76 .
perplexed76 . Apr 05, 2021 11:23AM ET
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point me out where gamblers saw strong job data
Catholic Man
CatholicMan Apr 05, 2021 11:15AM ET
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President Trump made this possible. Don't worry democrats have two years to ruin it.
tim banks
tim banks Apr 05, 2021 11:15AM ET
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lol you mean trumps economy was made possible by obama? if you're gonna spout off you have to accept trumps success was because obama
Amine Fourali
Amine Fourali Apr 05, 2021 11:15AM ET
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Infinity Qe made it possible that’s it...
Anthony Badalamenti
Anthony Badalamenti Apr 05, 2021 11:15AM ET
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Dems are already ruining the country. Injecting their communism into everything.
Joel Schwartz
Joel Schwartz Apr 05, 2021 11:15AM ET
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Anthony Badalamenti The FED is implimenting literal corporate socialism right now, and its led by Powell who is a Republican.
Lisa Parsons
Lisa Parsons Apr 05, 2021 11:15AM ET
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Joel Schwartz there’s a big difference between a Republican and a RINO
Lex Wild
Lex Wild Apr 05, 2021 11:12AM ET
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Just hit the buy button no matter when ;-)
nikhil nirmal
nikhil nirmal Apr 05, 2021 11:06AM ET
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speedy vaccination and jod data.. both are incouraging....good day friends
Catholic Man
CatholicMan Apr 05, 2021 11:06AM ET
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Due to President Trump's work.
nikhil nirmal
nikhil nirmal Apr 05, 2021 11:06AM ET
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now work is important in this situation.. good day Catholicman
Whaling Trawler
Whaling Trawler Apr 05, 2021 9:48AM ET
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Whoa!! I'm sure America is enjoying the fruits of a new industrial revolution like China
andy matalobos
andy matalobos Apr 05, 2021 9:30AM ET
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The Biden administration is doing a superb job with the vaccination acceleration and the great economic recovery in modern history.......Great Job Joe!
Catholic Man
CatholicMan Apr 05, 2021 9:30AM ET
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Funniest thing I've read today. President Trump brought us to this point.
Woon Soo Lee
Woon Soo Lee Apr 05, 2021 8:56AM ET
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stimulus package plans show it's itself the coming years to be gearing more profits earnings and economics of scales
jack hong
jack hong Apr 05, 2021 8:43AM ET
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who are the buyers as S&P 500 trades above 4000? how much upside is left for BAC as it trades near $40? and MSFT above 240 (P/E of 36)?  my gut feel is that nobody really knows, but fund managers just buy them anyway to keep up with the indices, no one wants to underperform market averages and risk losing customers.
Robert Cox
Robert Cox Apr 05, 2021 8:43AM ET
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Best not to let people hear you being logical. They may think you're imsane.
d5hin1990 .
d5hin1990 . Apr 05, 2021 8:43AM ET
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With so much stimulus passed and another 2trillion in construction bill on the way. There is a lot more upside sp500 is undervalue IMO i believe sp500 should be around 4500 by now. Sp500 would be close to 5000 end of year so another 1000points upside im all in long i hate to say it but stocks makes people rich
jack hong
jack hong Apr 05, 2021 8:33AM ET
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well, yes, futures up 0.5%.  big question is: how much upside is left at these elevated levels.
d5hin1990 .
d5hin1990 . Apr 05, 2021 8:33AM ET
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Lots man sp5000 end of year so 1000more upside for the sp500
 
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