Stocks Close Higher As Tech Shares Rebound, Dow Hits Record
May 06 2021 - 4:32PM
Dow Jones News
By Joe Wallace and Michael Wursthorn
U.S. stocks rose Thursday on upbeat corporate earnings and signs
of continued improvement in the labor market.
After fluctuating between gains and losses, the S&P 500
advanced to finish the day up 0.8%. Technology stocks, which had
been beaten down this week, rebounded, helping to steer the broad
benchmark higher. Consumer staple stocks acted as the market leader
after investors pushed shares of Kellogg up following
stronger-than-expected earnings.
Also helping the stock market was news that jobless claims
slipped below 500,000 last week for the first time during the
Covid-19 pandemic, suggesting the economic recovery continues. The
economy's rejuvenation since the onset of the Covid-19 pandemic has
been a key driver behind the stock market's ascent in recent
months, with most of the benefits going into companies that are
more closely tied to the U.S. economy.
"We should see cash flows and company cash flows really improve,
especially with the reopenings happening," said Mary Nicola, a fund
manager at PineBridge Investments. Although valuations are high,
stocks remain attractive compared with low-yielding bonds, she
added.
Investors will get a clearer signs of the jobs front on Friday
after the Labor Department releases its monthly hiring report.
The Dow Jones Industrial Average added more than 300 points, or
0.9%, to 34546, another record. The Nasdaq Composite turned 0.4%
higher after bouncing around the flatline, avoiding a fifth
straight down session.
Shares of Kellogg led the S&P 500 higher, rising 7.8% after
the food company topped analyst's quarterly projections and raised
its guidance for the year. That helped push the index's
consumer-staples sector up 1.2%.
PayPal bumped up its revenue guidance for the year, giving its
stock a 2.4% boost. Other tech stocks also rose, including
Facebook, Alphabet and Apple, helping to offset losses from earlier
in the week.
Weighing on the stock market was the healthcare sector.
Companies behind the Covid-19 vaccines took a hit after U.S. Trade
Rep. Katherine Tai said the U.S. would support waiving IP rights to
potentially enable companies in developing countries to manufacture
their own versions. Pfizer shed nearly 2%, while Johnson &
Johnson slipped 0.2%. Moderna fell 4.2%.
Elsewhere, shares of Etsy dropped more than 14% after the online
crafts marketplace projected a decline in revenue in the second
quarter.
News Corp, The Wall Street Journal's parent company, and Beyond
Meat are scheduled to report results after markets close.
Companies have blown past forecasts so far this earnings season.
Of the 381 companies on the S&P 500 that had reported through
Wednesday, 84% had topped analysts' expectations, according to
FactSet.
With the exception of Kellogg, PayPal and several others, many
companies beating forecasts have seen a lackluster response in
their share price, which has given the market a smaller boost than
most analysts had expected ahead of earnings season. Some investors
say that is a sign, alongside recent volatility in tech stocks,
that the rally that began last March is beginning to flag.
"Although the S&P is just 1% off its high, I think equity
markets are beginning to look very fatigued," said Paul O'Connor,
head of multiasset investments at Janus Henderson.
Indicators including surveys by the American Association of
Individual Investors suggest investors are almost uniformly
bullish, a setup that tends to precede a pullback in stocks,
according to Mr. O'Connor. "There are such high expectations
embedded in markets that we're going to need a steady stream of
good news just to maintain the current prices," he said.
In the bond market, the yield on 10-year Treasury notes slipped
to 1.793% from 1.584% Wednesday. Yields, which move in the opposite
direction to bond prices, have fallen for four consecutive
days.
Overseas, the Stoxx Europe 600 slipped 0.5%, weighed down by
shares of oil, gas, travel-and-leisure and technology companies. In
Asia, Japan's Nikkei 225 rose 1.8% and China's Shanghai Composite
slipped 0.2%.
Write to Joe Wallace at Joe.Wallace@wsj.com and Michael
Wursthorn at Michael.Wursthorn@wsj.com
(END) Dow Jones Newswires
May 06, 2021 16:17 ET (20:17 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
Beyond Meat (NASDAQ:BYND)
Historical Stock Chart
From Aug 2024 to Sep 2024
Beyond Meat (NASDAQ:BYND)
Historical Stock Chart
From Sep 2023 to Sep 2024