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Techs Push S&P 500 to Record High 04/09 16:24
Wall Street capped another week of gains with more milestones Friday, as
strength in technology and health care stocks helped push the S&P 500 and Dow
Jones Industrial Average to all-time highs.
(AP) -- Wall Street capped another week of gains with more milestones
Friday, as strength in technology and health care stocks helped push the S&P
500 and Dow Jones Industrial Average to all-time highs.
The S&P 500 rose 0.8% for its fourth record high this week and third
straight weekly gain. The Dow's latest milestone followed an all-time high on
Monday.
Stocks have benefited this week as bond yields, which had been steadily
ticking higher, retreated from highs hit earlier in the month. Higher yields
can slow down the economy by pushing up interest rates, making it more
expensive for people and businesses to borrow money. Bond yields rose Friday,
but that didn't weigh on stocks.
"The S&P 500 finished at another all-time high today as investors have
become comfortable enough with the current level of interest rates and
inflation to keep putting money into equities," said Chris Zaccarelli, chief
investment officer for Independent Advisor Alliance.
A late-afternoon burst of buying pushed the major stock indexes higher. The
S&P 500 rose 31.63 points to 4,128.80. The Dow gained 297.03 points, or 0.9%,
to 33,800.60. The Nasdaq composite picked up 70.88 points, or 0.5%, to
13,900.19.
Small company stocks, which have outgained the broader market this year,
lagged behind on Friday. The Russell 2000 index of smaller companies inched up
0.88 points, or less than 0.1%, to 2,243.47. Still, the index is up 13.6% so
far this year, while the S&P 500, which tracks large companies, is up 9.9%.
Big Tech stocks were among the better performers. Apple rose 2%, Microsoft
gained 1% and Intel added 1.8%. Health care companies also helped lift the
market. UnitedHealth climbed 3.1% and Cigna rose 3.3%.
Financial companies also rose, aided by the rise in bond yields, which
translates into higher interest rates lenders can charge on mortgages and other
loans. State Street gained 2.4% and Wells Fargo added 1.2%.
The yield on the 10-year U.S. Treasury note, which influences interest rates
on mortgages and other loans, rose to 1.66% from 1.63% late Thursday. It had
been as high as 1.75% on Monday.
Most analysts expect inflation to increase as the economy improves.
"We're seeing some evidence of inflation creeping into the market place, but
it's not problematic," said Terry Sandven, chief equity strategist at U.S. Bank
Wealth Management.
The market's latest gains are in line with the market's upward tack this
week as investors weigh concerns about the virus tripping up a steady economic
recovery against progress in vaccinations and business re-openings.
Investors are showing cautious optimism about the economic recovery,
especially in the U.S., where vaccine distribution as been ramping up and
President Joe Biden has advanced the deadline for states to make doses
available to all adults to April 19.
"There's optimism on the horizon that overall economic growth will continue
as the year unfolds," Sandven said.
But it's clear the recovery has a long way to go. The number of Americans
who filed for unemployment benefits last week rose again last week, as many
businesses remain closed or partially shut down due to the pandemic.
In remarks to the International Monetary Fund Thursday, Federal Reserve
Chair Jerome Powell said a number of factors are putting the nation "on track
to allow a full reopening of the economy fairly soon."
Investors will turn their attention to quarterly results next week, when
earnings season gets underway. The major banks are among the first to report
their results, including JPMorgan, Wells Fargo and Bank of America. Analysts
polled by FactSet have hiked their profit forecasts during the quarter. They
expect growth of just over 24%, compared with the view back in September that
companies in the S&P 500 would see 13% growth.
"On balance, we're seeing earnings accelerate to provide valuation support,"
Sandven said.
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