Stocks and index ETFs jumped again on Thursday, with two of the key averages reaching new highs, as investors piled back into tech stocks amid dampening interest rate concerns.
The S&P 500 climbed 1.44% to hit an all-time high for the first time in nearly a month. Meanwhile, the Dow Jones Industrial Average also added 1.04% to notch another intraday record. The Nasdaq Composite, which has been trading lower recently, surged 2.52% as investors continued to buy the dip in tech stocks like Tesla, Apple, Facebook, and Netflix.
Major stock ETFs are all rallying on Thursday as well. The SPDR Dow Jones Industrial Average ETF (DIA), SPDR S&P 500 ETF Trust (SPY), and Invesco QQQ Trust (QQQ) are all higher just after noon EST.
Investors sentiment was also boosted by a somewhat better-than-expected reading on weekly jobless claims data. The Labor Department revealed that first-time filings for unemployment insurance in the week finishing March 6 reached a seasonally adjusted total of 712,000, below the Dow Jones estimate of 725,000.
“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. “Combined with stimulus relief in sight and a muted CPI read yesterday plus increased vaccinations and decreased business restrictions, there’s a pretty optimistic picture being painted.”
While interest rates dropped marginally recently, the benchmark 10-year Treasury yield, which had retreated from its recent high of 1.6%, had little movement on Thursday, remaining near 1.51% .
The move in the Nasdaq Composite came swiftly after the tech-heavy index slipped into correction territory on Monday, where it fell over 10% from its high. The benchmark is now just 6% off its record high.
“The faster-than-expected acceleration of U.S. economic growth appears to be lifting inflation and longer-term interest rates,” Gary Schlossberg from the Wells Fargo Investment Institute said in a note. “The pace of these increases have been a recent concern to investors, but a recovery in interest rates and inflation is a typical occurrence early in a recover – faster this time, in our opinion, because of the unusually strong economic growth rebound.”
Investors are also eager to see more economic stimulus in their pockets, as House Democrats passed a $1.9 trillion coronavirus relief bill Wednesday. President Biden is expected to sign it into law Friday.
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