Dow hits milestone, S&P breaks record high on tech rally

Further bolstering sentiment was a jump in March US retail sales as Americans received additional pandemic relief checks from the government. — Reuters pic
Further bolstering sentiment was a jump in March US retail sales as Americans received additional pandemic relief checks from the government. — Reuters pic

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NEW YORK, April 16 — The Dow industrials closed above 34,000 for the first time on Thursday as the blue-chip benchmark and S&P 500 posted fresh record highs on a tech stock rally fueled by falling bond yields and strong March US retail sales.

The S&P 500 scored its second closing high this week, and the Dow surpassed its previous peak on April 9. The Nasdaq Composite finished above 14,000 for the first time since Feb. 16 and is now down less than 1 per cent from its Feb. 12 record high ending.

The S&P information technology sector also hit an all-time high. The benchmark and the communication services index were buoyed by big tech names, including Apple Inc, Microsoft Corp and Facebook Inc, which gained between 1.5 per cent and 1.9 per cent.

“Even though valuations are pretty high, you’ve got a lot of confidence the big tech giants are going to continue to be able to deliver enough cash flow to justify those valuations,” said Tim Murray, a T. Rowe Price Associates capital markets strategist.

Helping draw in cash for such names is the fact Treasury yields, after spiking upwards at the end of March, have been in retreat as investors increasingly accept the Federal Reserve’s assurances on maintaining an accommodative monetary policy despite higher inflation.

The benchmark 10-year Treasury yield slipped below 1.6 per cent for the first time since March 25.

After Goldman Sachs Group Inc, JPMorgan Chase & Co and Wells Fargo & Co kicked off reporting season on Wednesday with bumper results, Bank of America and Citigroup Inc also offered optimistic views on an economic recovery in their earnings reports on Thursday. However, their shares declined 2.9 per cent and 0.5 per cent.

“Uncharacteristically, expectations for earnings have improved for the quarter and what tends to move markets is when the numbers are far better than expected,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab.

The Dow Jones Industrial Average rose 305.1 points, or 0.9 per cent, to 34,035.99; the S&P 500 gained 45.76 points, or 1.11 per cent, at 4,170.42; and the Nasdaq Composite added 180.92 points, or 1.31 per cent, at 14,038.76.

Further bolstering sentiment was a jump in March US retail sales as Americans received additional pandemic relief checks from the government. Jobless claims also fell more than expected to 576,000 last week to a one-year low.

“For US equities, it’s the best of both worlds, as we have the 10-year down but we have good economic data. That’s exactly what you’d want to see,” said T Rowe’s Murray.

Cryptocurrency exchange Coinbase Global Inc bounced around before closing 1.7 per cent lower, a day after its high-profile debut on the Nasdaq that briefly valued it at more than US$100 billion.

Mobile app and gaming firm AppLovin Corp slumped 18.5 per cent on its first day of trading, having been valued by its initial public offering at US$28.6 billion.

Volume on US exchanges was 9.95 billion shares, compared with the 11.17 billion average for the full session over the last 20 trading days.

Advancing issues outnumbered declining ones on the NYSE by a 1.93-to-1 ratio.

The S&P 500 posted 90 new 52-week highs and no new lows; the Nasdaq Composite recorded 97 new highs and 53 new lows. — Reuters

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