By Yasin Ebrahim
Investing.com – The S&P 500 and Nasdaq closed at record highs Thursday, as tech and cyclical stocks racked up gains as investors bet on the economy charting a faster recovery amid an improving backdrop.
The S&P 500 jumped 1.07% to a record 3,871.11. The Dow Jones Industrial Average rose 1.08%, or 332 points, and the Nasdaq Composite ended 1.23% at a record high.
Initial jobless claims fell 33,000 to 779,000 in the week ending Jan. 23, beating economists' estimates for a smaller decline to 830,00. That marked the third consecutive week of declines as well as the lowest level since the end of November.
"The third consecutive week of decline, while still elevated, the ongoing improvement in claims suggests layoffs have slowed, a positive sign for the labor market as well as the broad-based recovery effort," Stifel said in a note.
The upbeat labor market data added credence to investor bets that the job gains rebounded last month after falling in December.
"Following a 140,000 decline in December, we forecast a solid 250,000 increase in January nonfarm payroll employment with a 290,000 increase for private employers and a 40,000 decline in government payrolls," Nomura said.
"We expect food services employment to increase in January after falling sharply in December, but look for further moderation in employment growth for other industries that have been less affected by the pandemic," it added.
The signs of an improving economy coupled with expectations for speedier vaccine rollout in the months ahead have pushed U.S. Treasury yields higher, widening the 5-to-30 year treasury curve – a gauge on the health of the economy – by the most since March 2016.
JPMorgan Chase & Co (NYSE:JPM), Bank of America Corp (NYSE:BAC) and Wells Fargo & Company (NYSE:WFC) were up more than 2%.
Technology was not far behind after giving up its gains late into the close Thursday as earnings continued to surprise to the upside.
PayPal (NASDAQ:PYPL) rallied more than 6% after beating quarterly estimates on both the top and bottom lines. The payments processor has seen its market cap rise above $300 billion for the first time.
Align (NASDAQ:ALGN) Technology jumped to record high, up more than 12%, after reporting quarterly profit and revenue that beat Wall Street estimates.
Apple (NASDAQ:AAPL), meanwhile, was up more than 2% on reports that it had tapped Hyundai to support its push into the electric vehicle market. The Apple Car could make its debut on the road in 2025, according to media reports.
Alphabet (NASDAQ:GOOGL) and Amazon.com (NASDAQ:AMZN), which both reported markedly better-than-expected quarterly results earlier this week, were roughly flat on the day.
The retail-led short-squeeze trade in AMC Entertainment Holdings (NYSE:AMC) and GameStop continued to run out of steam, with both stocks down 20% and 42%,respectively.
In others news, Canada Goose (NYSE:GOOS) posted quarterly earnings that beat analysts' estimates, led by a 40% jump in online sales and a strong rise in direct to consumer sales in China. Its shares rose 22%.