NEW YORK CITY, RAW – The S&P 500 and the Dow have hit record highs as worries about rising inflation subsided, while a bigger-than-expected fall in weekly jobless claims and the signing of a massive stimulus bill reinforced expectations of a strong recovery.
Mega-cap stocks Microsoft Corp, Apple Inc, Facebook Inc and Amazon.com Inc led the rally on Thursday, recouping losses from a recent pullback and helping the benchmark S&P 500 surpass its February 16 peak of 3,950.43.
The blue-chip Dow scaled a new record for the fourth straight session, while the tech-heavy Nasdaq is now less than five per cent below its February 12 peak after slumping over 10 per cent to confirm a correction at the beginning of this week.
President Joe Biden signed his $US1.9 trillion stimulus bill into law on Thursday, commemorating the one-year anniversary of a US lockdown over the coronavirus pandemic with a measure designed to bring relief to Americans and boost the economy.
The relief package, on top of the ongoing recovery fuelled by the coronavirus vaccination rollout and fading fears of inflation, were driving the market, said Jason Pride, chief investment officer for private wealth at Glenmede in Philadelphia.
While tech led Thursday’s advance, there was still a rotation into value stocks, which have outperformed high-priced growth stocks since November.
Unofficially, the Dow Jones Industrial Average rose 188.57 points, or 0.58 per cent, to 32,485.59, the S&P 500 gained 40.46 points, or 1.04 per cent, to 3,939.27 and the Nasdaq Composite added 329.84 points, or 2.52 per cent, to 13,398.67.
Fewer-than-expected Americans filed new claims for unemployment benefits last week as vaccinations allow more segments of the economy to reopen.
The latest US Treasury auction – $US24 billion of 30-year bonds – did not reignite inflation concerns unlike a weak seven-year note auction last month that helped send yields higher, spooking markets.
The S&P 500’s industrials and communication services sectors reached record highs.
Wall Street’s fear gauge hit a two-week low at 21.45 points, a sign of easing fears over inflation.
Coupang, backed by SoftBank Group Corp, was valued about $US109 billion in its market debut on Thursday after South Korea’s largest e-commerce company raised about $US4.6 billion in the biggest US initial public offering this year.
SoftBank racked up a roughly $US33 billion paper gain after Coupang’s stock soared 81 per cent to open at $US63.50.
Bumble Inc jumped after it reported a bigger-than-estimated rise in fourth-quarter revenue and said it expected pent-up demand from people who had been avoiding dating in person due to the pandemic.
A so-called “meme” stock AMC Entertainment Holdings Inc gained as the cinema chain said the rollout of COVID-19 vaccines and the release of major movies would boost sales this year.
Oracle Corp slumped as the business software maker’s cloud division reported quarterly revenue that missed analysts’ estimates on increased competition from Amazon.com and Microsoft.