US Stocks Rise to Record Levels 04/15 09:36
U.S. stocks are rallying toward records on Thursday after a suite of
encouraging data showed how hungry Americans are to spend again, how fewer
workers are losing their jobs and how much fatter corporate profits are getting.
NEW YORK (AP) -- U.S. stocks are rallying toward records on Thursday after a
suite of encouraging data showed how hungry Americans are to spend again, how
fewer workers are losing their jobs and how much fatter corporate profits are
The S&P 500 was 0.7% higher at 4,151 in early trading and on track to
surpass its all-time high of 4,141.59 set on Tuesday. The Dow Jones Industrial
Average was also on pace for a record, up 230 points, or 0.7%, at 33,961. The
Nasdaq composite was 1.1% higher, as of 9:50 a.m. Eastern time.
Expectations are very high on Wall Street that the economy -- and thus
corporate profits -- are in the midst of exploding out of the cavern created by
the pandemic, thanks to COVID-19 vaccinations and massive support from the U.S.
government and Federal Reserve. Report after report on Thursday only bolstered
those expectations further.
One report showed that sales at U.S. retailers jumped 9.8% in March from
February, blowing past economists' forecasts for 5.5% growth. Much of the surge
was due to $1,400 payments from the U.S. government's latest economic rescue
effort hitting households' bank accounts. Economists said it shows how primed
people are to spend as the economy reopens and conditions brighten. That's huge
for an economy that's made up mostly of consumer spending.
Another report gave an encouraging read on the job market, showing 576,000
people applied for unemployment benefits last week. That's well below the
700,000 that economists had forecast and down from 769,000 the prior week. It's
also the lowest the number has been since the pandemic.
Adding to the optimism, more big U.S. companies reported even healthier
profits for the first three months of 2021 than analysts had forecast.
Expectations are already high for this earnings reporting season, which
unofficially got underway on Wednesday and could result in the strongest growth
in more than a decade.
BlackRock, Citigroup and UnitedHealth Group all reported bigger profits for
the first quarter than analysts expected. BlackRock rose 2.6%, Citigroup gained
0.4% and UnitedHealth climbed 3.6%.
Even Delta Air Lines, which reported weaker results for the start of 2021
than expected, highlighted areas of optimism. It said it could return to making
profits by late summer if the recovery it's seeing in air travel continues. Its
shares fell 2.9%.
With growth expectations so high, some investors are worried about the
possibility that inflation could be set to swing upward and stay high. If it
were to sustain itself, high inflation could send bond prices tumbling, hurt
corporate profit margins and trigger volatility across markets worldwide.
U.S. Treasurys remained notably subdued following Thursday morning's
stronger-than-expected reports, and longer-term yields actually fell to the
surprise of some analysts. The yield on the 10-year Treasury dropped to 1.59%
from 1.63% late Wednesday.
It's reminiscent of what happened earlier this week, when a report on the
Consumer Price Index came in higher than expected. It would have made sense if
the worse-than-expected inflation report had caused investors to send bond
yields higher, but they largely shrugged it off.
The subdued reactions may be a result of how unpredictable data can be as
the pandemic and government efforts to counteract it distrort everything. And,
for now at least, the numbers seem to be pointing toward more strength.
"While we haven't necessarily seen the market move on strong economic beats
or misses, it's certainly a step in the right direction," said Mike Loewengart,
managing director of investment strategy at E-Trade Financial.
In European stock markets, Germany's DAX returned 0.3%, and France's CAC 40
rose 0.4%. The FTSE 100 in London gained 0.6%.
In Asia, Japan's Nikkei 225 rose 0.1%, South Korea's Kospi gained 0.4% and
Hong Kong's Hang Seng slipped 0.4%. Stocks in Shanghai fell 0.5%.