NEW YORK, RAW – The S&P 500 has closed at a record high as US Treasury yields fell following softer than anticipated labour 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 signalled 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 1.624 per cent, its lowest level since March 26, 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 neighbours, 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.”
The Dow Jones Industrial Average rose 57.31 points, or 0.17 per cent, to 33,503.57, the S&P 500 gained 17.22 points, or 0.42 per cent, to 4,097.17 and the Nasdaq Composite added 140.47 points, or 1.03 per cent, to 13,829.31.
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 2.0 per cent of its February 12 record closing high.
The Russell 1000 growth index, which consists heavily of tech-related stocks, gained 1.05 per cent.
Its value counterpart, comprising mostly financials and energy names, edged 0.05 per cent lower.
Trading activity has tapered off, with the four 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 February 5.
Tesla Inc advanced 1.91 per cent on US President Joe Biden administration’s $US174 billion ($A228 billion) proposal to boost electric vehicles.
US shares of Canopy Growth Corp dropped 4.81 per cent on a deal to buy rival Supreme Cannabis Co Inc for $C323.3 million ($A336.0 million) as the world’s biggest cannabis producer bolstered its portfolio to tap surging demand.
Advancing issues outnumbered declining ones on the NYSE by a 1.80-to-1 ratio; on Nasdaq, a 2.13-to-1 ratio favoured advancers.
The S&P 500 posted 36 new 52-week highs and 1 new lows; the Nasdaq Composite recorded 77 new highs and 29 new lows.
Volume on US exchanges was 9.23 billion shares compared with the 11.93 billion average for the full session over the last 20 trading days.