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S&P 500 Closes Above Record 4,000 as Tech Swagger Keeps Bulls Hungry

Stock MarketsApr 01, 2021 04:17PM ET
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By Yasin Ebrahim

Investing.com – The S&P 500 closed above 4,000 level for the first time ever Thursday, led by tech and value, but it's the latter that is set for swashbuckling gains as the rotation to cyclicals is not over, according to one expert.  

The S&P 500 rose 1.18% to closed at a record of 4,019.90, the Dow Jones Industrial Average rose 0.52%, or 171 points, the Nasdaq Composite was up 1.76%.

Tech stocks started the quarter in rally mode, continuing to their rebound from oversold levels, but the reprieve could prove short-lived as the recent rotation to value from growth still has room to go.

"It took a long time for that previous rotation [following the tech bubble] to play out," Eric Diton, president and managing director at The Wealth Alliance, said in an interview with Investing.com. "We're here again, growth got very expensive and value is starting to outperform again, but no one believes in [the value] trade and they're all saying it's going to end."

"But if you look at the returns in the last 12 months on tech versus everything else the gap is still big. Three years, five years, or even 10 years ago, the growth outperformance relative to value is historic. So, value has a lot of catching up to do," Diton added. 

Facebook (NASDAQ:FB), Apple (NASDAQ:AAPL), Amazon.com (NASDAQ:AMZN), Netflix and Google-parent Alphabet (NASDAQ:GOOGL) were higher. Chip stocks also helped push the broader tech sector following bullish quarterly results from Micron Technology (NASDAQ:MU) that stoked investor appetite for the sector.

Financials and energy were among the biggest gainers for value, with the latter aided by rising oil prices even as major oil producers agreed to raise output.

Marathon Oil (NYSE:MRO), Diamondback Energy (NASDAQ:FANG) and Devon Energy (NYSE:DVN) were among the biggest gainers for the sector.

On the labor market front, an unexpected rise in jobless claims didn't dent optimism for a strong rebound in nonfarm payrolls slated to be released Friday.

"[W]e remain optimistic about claims and the labor market more broadly in the near-term," Jefferies (NYSE:JEF) said in a note. "With more vaccine distribution and further reopening of the labor-intensive service sector, we will see claims continue to decline on trend over time."

In other news, Nio (NYSE:NIO) climbed 2% after reporting a 373% jump in deliveries for March from the prior-year, providing investor with some respite after the Chinese electric vehicle trimmed its production forecast earlier this month, citing supply-chain disruptions.

The record-setting day for stocks comes a day after President Joe Biden unveiled his $2.2 trillion stimulus package to support investment in key infrastructure including roads, airports, broadband rollout and more.

The bill, which will likely need to be tweaked to win the backing of moderate Democrats, represents a double edge sword, however, as it will be partly funded by tax increases that could force corporations to rein in stock buybacks and dividends.  

"When Trump put through those tax cuts, we saw a pretty big increase in buyback activity and notable dividend increases. So [a decline in buybacks and dividends] is entirely possible, and would make some sense," Diton said.

S&P 500 Closes Above Record 4,000 as Tech Swagger Keeps Bulls Hungry
 

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Comments (10)
Itz Mayzan
Itz Mayzan Apr 02, 2021 5:08AM ET
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cool
President Xi Jinping
President Xi Jinping Apr 02, 2021 12:33AM ET
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Market is designed to go up, it always has and always will, for the patient
Warren Saevitzon
Warren Saevitzon Apr 02, 2021 12:33AM ET
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Until you release another virus
CHAD TENDIES
CHAD TENDIES Apr 01, 2021 7:29PM ET
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The dollar will collapse. You cannot print your way to prosperity.
President Xi Jinping
President Xi Jinping Apr 01, 2021 7:29PM ET
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Jealous china?
wally spaller
wally spaller Apr 01, 2021 4:50PM ET
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alot of real special people on this post.
marc emanuel
marc emanuel Apr 01, 2021 4:50PM ET
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'a lot'
Mostafa Ajjouj
Mostafa Ajjouj Apr 01, 2021 4:50PM ET
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me money oky
Lloyd Barrios
Lloyd Barrios Apr 01, 2021 4:45PM ET
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The market will go parabolic upward in the next couple months.  The gains will be astounding until the market tops out.  Then the market will crash.  This will be much like the crash of 1929.  Don't HODL as we will not see the record highs placed this year in the DOW, S&P and NASDAQ for years to come.
Tobechukwu Olumba
Tobechukwu Olumba Apr 01, 2021 4:45PM ET
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This market bubble is growing
Dave Jones
Dave Jones Apr 01, 2021 4:38PM ET
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Trump gave the tax cuts for investment in jobs and factories but all they did was gorge themselves on buybacks and dividends. Corporate America is run primarily by 2 shadowy organizations that also control the fed. Unfortunately.
Michael Loyd
Michael Loyd Apr 01, 2021 4:38PM ET
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What are those 2 organizations?
David Fong
David Fong Apr 01, 2021 4:30PM ET
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With the way this is going, the market bubble gets bigger and will never crash
Michael Garrett
Michael Garrett Apr 01, 2021 4:30PM ET
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too big to fail
Jouni Matero
Jouni Matero Apr 01, 2021 4:30PM ET
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Never? Lol
Lloyd Barrios
Lloyd Barrios Apr 01, 2021 4:30PM ET
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We are getting close to the end of the Bull run.  The market will crash by the end of 2021.
Michael Garrett
Michael Garrett Apr 01, 2021 4:28PM ET
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central banks and congress deserve death
 
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