On a tech market
rally, fuelled by declining bond yields and solid March U.S. retail sales, the
Dow industrials (.DJI) closed above 34,000 for the first time on Thursday, with
the blue-chip benchmark and S&P 500 (.SPX) posting new record highs.
This week, the
S&P 500 set a new closing high, and the Dow surpassed its previous high
from April 9. The Nasdaq Composite (.IXIC) closed above 14,000 for the first
time since February 16, and is now down less than 1% from its record high
ending on February 12.
The S&P
information technology sector (.SPLRCT) also reached a new peak. Big tech names
including Apple Inc (AAPL.O), Microsoft Corp (MSFT.O), and Facebook Inc (FB.O),
which earned between 1.5 % and 1.9 %, boosted the benchmark and the
communication services (.SPLRCL) index.
"Even though
valuations are high, you have a lot of faith in the major tech giants' ability
to generate enough cash flow to support those valuations," said Tim
Murray, a capital markets analyst at T. Rowe Price Associates.
The fact that
Treasury yields have been falling after spiking upwards at the end of March is
helping to draw in cash for certain names, as investors gradually embrace the
Federal Reserve's promises of maintaining an accommodative monetary policy amid
higher inflation. For the first time since March 25, the benchmark 10-year
Treasury yield fell below 1.6 %.
Following the
positive results reported by Goldman Sachs Group Inc (GS.N), JPMorgan Chase
& Co (JPM.N), and Wells Fargo & Co (WFC.N) on Wednesday, Bank of
America (BAC.N) and Citigroup Inc (C.N) in their earnings reports on Thursday,
both expressed optimism about the economy. Their stock prices, however, fell by
2.9 % and 0.5 %, respectively.
"Unusually,
earnings forecasts for the quarter have risen, and what tends to drive markets
is when the results are much better than predicted," said Randy Frederick,
Charles Schwab's vice president of trading and derivatives.
The Dow Jones
Industrial Average (.DJI) increased 305.1 points, or 0.9 %, to 34,035.99; the
S&P 500 (.SPX) increased 45.76 points, or 1.11 %, to 4,170.42; and the
Nasdaq Composite (.IXIC) increased 180.92 points, or 1.31 %, to 14,038.76.
An increase in
March retail sales in the United States helped to boost sentiment, as Americans
got additional pandemic relief checks from the government. Last week, jobless
claims dropped more than anticipated to 576,000, a one-year low.
"It's the
best of both worlds for US equities, with the 10-year down but positive
economic data. That's just what you're looking for, isn't it? "Murray of T
Rowe remarked.
Coinbase Global
Inc, a cryptocurrency exchange, bounced around until closing 1.7 % lower, a day
after its high-profile Nasdaq debut that briefly priced it at more than $100
billion.