S&P closes at record on tech boost as US Treasury yields retreat

The Nasdaq logo is displayed at the Nasdaq Market site in New York, November 14, 2015. — Reuters pic
The Nasdaq logo is displayed at the Nasdaq Market site in New York, November 14, 2015. — Reuters pic

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NEW YORK, April 9 — The S&P 500 closed at a record high on Thursday, as US Treasury yields fell following softer-than-anticipated labor market data, boosting technology and other growth stocks.

Weekly initial jobless claims data showed a second straight rise, conflicting with the recent payrolls report, and buttressed the Federal Reserve’s dovish policy stance to keep interest rates lower for a substantial period.

Federal Reserve Chair Jerome Powell signaled on Wednesday the central bank is nowhere near reducing support for the US economy, saying an expected rise in prices this year is likely to be temporary.

The softer data helped yields on the benchmark 10-year US Treasury note fall as low as 1.628 per cent for a second straight day as it continues to back away from a 14-month high of 1.776 per cent hit in late March.

“Wall Street rewards growth, that doesn’t mean value names will never go up, they will go up because they have more growth prospects than their neighbors, that is what this whole thing is predicated on,” said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh.

“It was kind of ridiculous that bond yields were preceding runaway inflation and that was not the case, so tech lives another day.”

Unofficially, the Dow Jones Industrial Average rose 57.77 points, or 0.17 per cent, to 33,504.03, the S&P 500 gained 17.27 points, or 0.42 per cent, to 4,097.22 and the Nasdaq Composite added 141.30 points, or 1.03 per cent, to 13,830.14.

The recent pullback in yields has helped high growth names such as those in technology, the sector that posted the session’s biggest rise. Megacap stocks such as Apple , Microsoft and Amazon were the biggest boosts to the S&P 500.

The gains sent the tech-heavy Nasdaq to a seven-week high and within 2 per cent of its February 12 record closing high.

The Russell 1000 growth index, which consists heavily of tech-related stocks, gained. Its value counterpart, comprising mostly financials and energy names, edged lower.

Trading activity has tapered off, with the three lowest volume days of the year occurring this week ahead of first-quarter earnings season next week with results from big US banks on tap. Analysts have raised expectations for first-quarter S&P 500 earnings increase to 24.2 per cent, according to Refinitiv IBES data as of April 1, versus 21 per cent forecast on Feb. 5.

Tesla Inc advanced on the Joe Biden administration’s US$174 billion proposal to boost electric vehicles.

US shares of Canopy Growth Corp dropped on a deal to buy rival Supreme Cannabis Co Inc for CUS$323.3 million (RM1.06 billion), as the world’s biggest cannabis producer bolsters its portfolio to tap surging demand. — Reuters

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