S&P 500 resumes record run on economic rebound hopes

FILE PHOTO: A U.S flag is seen on the New York Stock Exchange in the Manhattan borough of New York City
FILE PHOTO: A U.S flag is seen on the New York Stock Exchange in the Manhattan borough of New York City, New York, U.S., November 6, 2020. REUTERS/Carlo Allegri/File Photo

April 6, 2021

By Medha Singh and Shivani Kumaresan

(Reuters) – The S&P 500 hit a record high for the fourth straight session on Tuesday as economy-linked and tech stocks gained ground on confidence that the U.S. economy is on its path to a roaring rebound.

Among major S&P sectors, energy, consumer discretionary and consumer staples outperformed. Financials and real estate slipped.

The S&P 500 and the Dow reached record levels with the CBOE volatility index retreating to pre-pandemic lows, driven by fiscal stimulus packages and swift COVID-19 vaccinations in the United States that led to blowout employment as well as service sector reports for March.

Between optimism over stimulus, a reduction in COVID-19 infections and increased vaccine rollouts, there are worries about how the stimulus is going to be paid for, increase in taxes and the potential for higher inflation, said Rick Meckler, partner at Cherry Lane Investments in New Jersey.

Tech and other growth stocks <.RLG> have awakened after lagging in recent weeks behind so-called value stocks <.RLV> that are expected to outperform as the economy emerges from the coronavirus pandemic.

The tech-heavy Nasdaq is now about 3% from its February record high after falling as much as 12% from that level.

Progress in President Joe Biden’s new infrastructure proposal and the start of the earnings season in the coming weeks could dictate the course of stock markets, analysts said.

Data on Tuesday showed U.S. job openings increased more than expected in February.

At 11:39 a.m. ET, the Dow Jones Industrial Average was down 30.28 points, or 0.09%, at 33,496.91 and the S&P 500 gained 6.57 points, or 0.16%, at 4,084.48. The Nasdaq Composite rose 54.28 points, or 0.40%, at 13,759.87.

Snap Inc jumped 5.3% after Atlantic Equities upgraded its rating on the photo-messaging app owner’s shares to “overweight” from “neutral”.

Norwegian Cruise Line Holdings Ltd added 5.5% as it said it would begin sailing outside the United States from the Caribbean and Greek Isles in July, restarting trips after a year-long hiatus brought on by the pandemic.

Illumina Inc gained 8.5% after the gene-sequencing company set current-quarter revenue target ahead of analysts’ expectations.

Advancing issues outnumbered decliners by a 1.7-to-1 ratio on the NYSE and by a 1.2-to-1 ratio on the Nasdaq.

The S&P index recorded 17 new 52-week highs and no new low, while the Nasdaq recorded 58 new highs and five new lows.

(Reporting by Medha Singh and Shivani Kumaresan in Bengaluru; Editing by Maju Samuel)

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