The S&P 500 and the Dow reached all-time highs Thursday 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, Apple, Facebook and Amazon.com led the rally, 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 set a record for the fourth straight session, while the tech-heavy Nasdaq is now less than 5% below its February 12 peak after slumping more than 10% to confirm a correction at the beginning of this week.
President Joe Biden signed his $1.9 trillion stimulus bill into law Thursday, commemorating the one-year anniversary of a U.S. 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 fueled 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%, to 32,485.59; the S&P 500 gained 40.46 points, or 1.04%, to 3,939.27; and the Nasdaq Composite added 329.84 points, or 2.52%, 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.
People share drinks and eat crawfish inside of Bar 5015 as the state of Texas lifts its mask mandate and allows businesses to reopen at full capacity during the coronavirus pandemic in Houston, Texas, March 10, 2021.
“The drop in jobless claims is another win for the week, and a solid sign that we’re making some strides toward pre-pandemic life,” said Mike Loewengart, managing director of investment strategy at E*Trade Financial.
The latest U.S. Treasury auction – $24 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.
“That story line has dissipated a little bit,” said Pride, pointing to tame consumer prices data for February.
The S&P 500’s industrials and communication services sectors reached all-time 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 at about $109 billion in its market debut on Thursday after South Korea’s largest e-commerce company raised around $4.6 billion in the biggest U.S. initial public offering this year.
SoftBank racked up a roughly $33 billion paper gain after Coupang’s stock soared 81% to open at $63.50.
A so-called “meme” stock, AMC Entertainment Holdings, gained as the cinema chain said the rollout of COVID-19 vaccines and the release of major movies would boost sales this year.