S&P 500 hovers near all-time high as banks, industrial rise

A woman wears a mask near the New York Stock Exchange (NYSE) in the Financial District in New York, US, March 4, 2020. — Reuters pic
A woman wears a mask near the New York Stock Exchange (NYSE) in the Financial District in New York, US, March 4, 2020. — Reuters pic

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NEW YORK, April 9 — The S&P 500 paused today after hitting an all-time high as economy-linked stocks including banks and industrials gained on optimism around strong US economic growth.

Financial stocks rose 0.9 per cent, more than any other S&P sector, with Bank of America Corp, Citigroup Inc and JPMorgan Chase & Co rising between 0.8 per cent and 1.1 per cent.

The banks will kick off the first-quarter earnings season next week, and analysts expect profits for S&P 500 firms to have jumped about 25 per cent year on year, the strongest performance for the quarter since 2018, according to Refinitiv IBES data.

“We have had a tremendous run recently and there’s some excitement about how strong corporate America’s earnings will be,” said Ryan Detrick, senior market strategist at LPL Financial in Charlotte, North Carolina.

“It is a chance to justify the rallies that we have seen recently to new highs.”

Weaker-than-expected labor market data yesterday eased inflation worries and validated the Federal Reserve’s accommodative stance, lifting the technology-heavy Nasdaq 1 per cent higher and powering the S&P 500 to a record close.

President Joe Biden will release his first budget proposal to Congress today, offering a long-awaited glimpse into a policy agenda that will mark a sharp departure from his predecessor, Donald Trump.

At 9.56am ET, the Dow Jones Industrial Average was up 92.41 points, or 0.28 per cent, at 33,595.98, the S&P 500 was up 5.92 points, or 0.14 per cent, at 4,103.09, and the Nasdaq Composite was down 35.52 points, or 0.26 per cent, at 13,793.79.

Technology and communication services stock, which house high-flying names, inched lower.

Still, the Russell 1000 growth index, which comprises mainly technology-related stocks, is set to outperform its value counterpart, made up of mostly financials and energy names, for a second consecutive week following the recent pullback in longer-dated Treasury yields.

“This week is a reminder that technology is not dead,” Detrick said.

“It’s still a group that has a lot of explosive growth and it’s a nice change for investors who felt some pain from tech’s under performance earlier this year.”

Bank of America’s weekly fund flow figures showed investors have pumped more money into equities over the past five months than in the last 12 years.

Honeywell gained about 2.2 per cent as Jefferies and J.P. Morgan raised their price targets on the US aero parts maker’s shares.

Declining issues outnumbered advancers for a 1.06-to-1 ratio on the NYSE and a 1.87-to-1 ratio on the Nasdaq.

The S&P index recorded 31 new 52-week highs and no new low, while the Nasdaq recorded 40 new highs and 19 new lows. — Reuters

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