The market hits an all-time excessive after blowing out financial information and robust financial institution income
US stocks rose to record levels Thursday after major companies reported strong gains and new economic data suggested a rebound in consumer spending and the labor market.
The Dow Jones Industrial Average rose 250 points to an all-time high, reaching 34,000 points for the first time. The S&P 500 gained 0.9% and also reached an intraday record. The Nasdaq Composite gained 1.1%.
Technology stocks rallied as bond yields fell. Netflix, Facebook, and Alphabet each rose more than 2%, while Amazon, Microsoft, and Apple each gained at least 1%. The 10-year government bond yield fell 11 basis points below 1.53%. Higher rates tend to undermine future profits for growth-oriented companies.
Retail sales rose 9.8% in March as additional incentives boosted consumer spending, the Commerce Department reported Thursday. That number beat the Dow Jones estimate of 6.1%.
A separate report dated Thursday showed that initial unemployment insurance claims had dropped to their lowest level since March 2020. The Department of Labor reported 576,000 new jobless claims for the week ending April 10. The economists polled by Dow Jones expected a total of 710,000.
“While 34,000 is just another number in its own right, this is a monumental feat considering the time we were at that time last year,” said Ryan Detrick, chief marketing strategist at LPL Financial. “The speed and resilience of this economic recovery is unlike anything we’ve seen, and it helps justify stocks at all-time highs.”
Shares of UnitedHealth, a Dow member, rose 4% after results beat predictions on the road and health insurer raised its guidance for 2021.
Pepsi stock rose 0.3% after the snacks and beverages maker posted a nearly 7% increase in sales in the most recent quarter, beating estimates.
The market has continued to improve in recent sessions, given the economic reopening and trillion dollar incentives to hit new records. The S&P 500 was up nearly 10% in 2021, with Energy and Finance being the most recent year to date.
“I am incredibly optimistic about the markets and you are right to be concerned about our shortcomings,” said Larry Fink, CEO of BlackRock, in an interview on Squawk Box. “If we don’t have sustained economic growth that is sustainable for the next 10 years, our deficits will play a role and raise interest rates … I believe, due to monetary incentives, tax incentives and cash on the verge of profits, markets are fine. The Markets will continue to be stronger. “
Citigroup shares erased previous gains, most recently trading 0.4% lower. The bank posted results that exceeded analysts’ estimates for first quarter earnings, with strong investment banking revenues and a higher than expected release of loan loss provisions.
Bank of America stocks rose as profits spilled over the last quarter on booming trade and investment banking results and the release of credit risk reserves. However, stocks fell 2%.
The new public crypto exchange Coinbase wiped out previous gains and traded 1.6% lower in volatile trading. The stock received a boost earlier after it was revealed that Ark Invest’s Cathie Wood was loaded on the first day of trading.
On Tuesday, the Food and Drug Administration called for a break in J & J’s Covid-19 vaccine administration after six people in the United States developed a rare blood clot disorder. The announcement sparked a sell-off when the Games reopened earlier this week, but is not expected to have a material impact on the pace of U.S. vaccine rollouts.
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