Dow Surpasses 34000 on Strong Earnings, Economic Data--Update
By Karen Langley and Caitlin Ostroff
The Dow Jones Industrial Average closed above 34000 for the
first time Thursday after strong earnings and upbeat economic data
sent stocks climbing.
The S&P 500 also notched a record close, its 22nd of the
year. A powerful rally has pushed both indexes up 11% in 2021, and
many investors believe the rollout of Covid-19 vaccines and
plentiful government spending mean stocks have room to keep
Shares of big tech companies pushed indexes higher as the yield
on the 10-year U.S. Treasury note recorded its largest one-day
decline since November. Falling yields tend to boost technology
stocks, which often trade at high prices partly because of
expectations of growth far into the future. Apple shares gained
1.9%, while Microsoft shares rose 1.5%.
The blue-chip index advanced 305.10 points, or 0.9%, to
34035.99, its 20th record close of the year. The S&P 500 added
45.76 points, or 1.1%, to 4170.42. The Nasdaq Composite climbed
180.92 points, or 1.3%, to 14038.76, off 0.4% from its February
First-quarter earnings season kicked off in earnest this week,
and on Thursday several big banks reported profits that exceeded
forecasts. Analysts expect that earnings among companies in the
S&P 500 jumped 30% in the first quarter from the same period a
year earlier, according to FactSet.
"There's elevated expectations coming into this quarter, but we
still think that there's going to be a significant amount of
companies beating those estimates," said Chad Oviatt, director of
investment management at Huntington Private Bank.
On Thursday investors rewarded shares of several reporting
companies. BlackRock shares gained $16.77, or 2.1%, to $817.84
after the asset manager said its quarterly profit rose nearly 50%.
UnitedHealth Group shares climbed $14.38, or 3.8%, to $390.01 after
the healthcare services company posted a larger profit and stronger
revenue on the year in the first quarter.
Shares of Bank of America, by contrast, dropped $1.14, or 2.9%,
to $38.74 after the lender reported a jump in expenses.
Money managers also parsed new data that suggest an acceleration
in the economic recovery. U.S. retail sales -- a measure of
purchases at stores, at restaurants and online -- jumped 9.8% last
month. Household incomes have benefited from recent fiscal stimulus
measures that saw $1,400 checks hit some Americans' bank
"Economic data is going to continue to get better and better and
better as the economy opens up," said Tom Mantione, managing
director at UBS Private Wealth Management.
Fresh data also showed that 576,000 Americans applied for
first-time unemployment benefits in the week ended April 10, a
decrease from the 769,000 who applied in the week prior. The
Federal Reserve has said employment is one of the factors it is
watching to determine when to eventually lift interest rates.
Despite the strong economic news, the yield on the benchmark
10-year U.S. Treasury note dropped to 1.531%, from 1.637% on
Wednesday, indicating renewed demand for government debt.
"That is putting some pressure on the financial sector...and
that is helping some of the growthier stocks do well," said Linda
Bakhshian, senior portfolio manager at Federated Hermes. "I think
the 10-year is really driving the action today."
Lower rates tend to crimp banks' net interest margins, a measure
of lending profitability. The financial and energy groups were the
only two of the S&P 500's 11 sectors to decline Thursday.
Among individual stocks, newly listed cryptocurrency exchange
Coinbase ticked down $5.53, or 1.7%, to $322.75. Shares rose as
high as $429.54 during the stock's trading debut Wednesday and
ended the session at $328.28.
Overseas, the Stoxx Europe 600 gauge added 0.5%. The Shanghai
Composite Index declined 0.5%, and Hong Kong's Hang Seng Index
edged 0.4% lower. South Korea's Kospi added 0.4%.
Write to Karen Langley at firstname.lastname@example.org and Caitlin
Ostroff at email@example.com
(END) Dow Jones Newswires
April 15, 2021 17:26 ET (21:26 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.