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MARKET SNAPSHOT

The Dow and S&P 500 index closed at records on Thursday as economic reports affirmed a healthy economic recovery from the coronavirus pandemic, highlighted by retail sales surging in March after fiscal stimulus checks were paid to Americans while jobless benefit claims fell to a fresh low for the pandemic period.

Investors also parsed a crush of corporate quarterly results, including those from Bank of America and BlackRock.

How are stock benchmarks trading?

  • The Dow Jones Industrial Average gained 305.10 points, or 0.9%, to finish at 34,035.99, setting a new closing record and an intraday all-time high earlier in the session.
  • The S&P 500 index added 45.76 points to reach 4,170.42, a gain of 1.1%, booking a new record.
  • The Nasdaq Composite Index advanced 180.92 points, or 1.3%, to 14,038.76, topping the key 14,000 mark for the first time since February.

On Wednesday, the Dow closed up 53.62 points or 0.2% to 33,730.89, the S&P 500 finished 16.93 points or 0.4% lower at 4,124.66, while the Nasdaq Composite shed 138.26 points or 1% to close at 13, 857.84, off 1.7% from its Feb. 12 record high.

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What’s driving the market?

A big day for corporate earnings reports and economic data lifted stocks to new records on Thursday, aided by a slide in long-term bond yields which benefited technology stocks in particular.

“Although 34,000 [in the Dow] by itself is just another number, this is a monumental feat when you think back to where we were last year at this time,” said Ryan Detrick, Chief Market Strategist for LPL Financial. “The speed and resiliency of this economic recovery is unlike anything we’ve ever seen and it helps to justify stocks at all-time highs.”

U.S. retail sales surged almost 10% in March thanks to $1,400 stimulus checks paid to consumers by the federal government. Sales climbed 9.8% last month, the government said Thursday. Economists polled by Dow Jones and The Wall Street Journal had forecast a 6.1% increase.

Adding to the market’s optimism, weekly jobless benefit claims fell to a pandemic-era low. U.S. unemployment claims sank by 193,000 in the week of April 10, an unusually large decline that likely reflects both an improving economy but also continuing problems in processing applications for jobless benefits. Initial jobless claims filed traditionally through the states declined to a seasonally adjusted 576,000 from 769,000 in the prior week.

“Stellar jobless claims plus off the charts retail sales packs a positive one two punch and sends strong signals that the economy is full steam ahead toward recovery,” wrote Mike Loewengart, managing director at E-Trade Financial.

U.S. industrial production also rose 1.4% in March, after a revised 2.6% fall in the prior month that was caused by severe winter weather, the Federal Reserve said Thursday.

See: Coinbase is most valuable U.S. exchange after first day of trading

Investors also were poring over a first-quarter report from Bank of America Corp. after its profits more than doubled profit and beat expectations, citing strong growth in capital markets and lower credit costs. The bank also announced a $25 billion stock repurchase program.

Quarterly results from PepsiCo  Citigroup  BlackRock  and Delta Air Lines were also being digested, a day after Goldman Sachs Group  and JPMorgan Chase  delivered solid results.

Beyond earnings reports and economic data, some analysts said that investors may becoming more entrenched in thinking that the Federal Reserve will keep interest rates low and liquidity measures in place, despite rising inflation, to continue to stimulate the COVID-stricken economy.

Doubts about the Fed’s commitment had been driving up benchmark bond yields this year but lately yields have stabilized, with the 10-year Treasury note falling to 1.53% on Thursday.

“While there’s a lot of excitement in equities, traders are also keeping an eye on the fixed income markets. US Treasuries are showing that investors are becoming more convinced by the Federal Reserve’s message that inflation spikes are only transitory and won’t lead to a tightening of policy anytime soon,” wrote Hussein Sayed, Chief Market Strategist at FXTM, in a note.

On the public health front, a study by Oxford University found the number of people who receive blood clots after getting vaccinated with a coronavirus vaccine are about the same for those who get Pfizer PFE and Moderna MRNA vaccines as well as for the AstraZeneca AZN vaccine that was produced with the university’s help. The study comes after the Food and Drug Administration and the Centers for Disease Control and Prevention this week requested an immediate halt of Johnson & Johnson‘s one-shot COVID vaccine.

Meanwhile, the U.S. vaccine program, continues to show good progress.  The Centers for Disease Control and Prevention’s vaccine tracker calculates that as of Wednesday this week 123.9 million Americans had received at least one shot, equal to 37.3% of the population.

In other U.S. economic data, the Philadelphia Federal Reserve manufacturing index jumped to a reading of 50.2 in April from a revised 44.5 in the prior month, marking the highest level in almost 50 years. Economists had expected a reading of 42 after the initial reading for March of 51.8, according to a Wall Street Journal survey of economists.

Separately, the New York Federal Reserve’s Empire State Index rose to a reading of 26.3 in April from 17.4 in March, the New York Fed said—its highest reading since October 2017.

Which companies are in focus?

  • Shares of Coinbase Global edged lower Thursday, a day after the cryptocurrency platform became the most valuable U.S. exchange Wednesday amid strong demand for its newly listed stock.
  • ARK Invest bought cryptocurrency exchange Coinbase Global COIN, which went public Wednesday, for three of the ARK exchange-traded funds, including the flagship ARK Innovation ETF ARKK. ARK Invest bought Coinbase stock valued at $246 million for the ARK Innovation ETF, ARK Next Generation Internet ETF ARKW and ARK Fintech Innovation ETF ARKF. ARK Invest CEO Cathie Wood spoke of Coinbase’s potential, as well as volatility, in an interview with Bloomberg BNN on Wednesday. Shares of Ark Innovation are up 1.5%.
  • Shares of UnitedHealth Group IncUNHjumped 3.9% into record territory Thursday, after the healthcare services company reported first-quarter profit and revenue that rose above expectations and raised its full-year outlook.
  • PepsiCo Inc. said its profit rose for the recent quarter as sales grew. Shares were up 0.1%
  • Tapestry Inc. TPR said Thursday it has made Todd Kahn its permanent chief executive and brand president of Coach with immediate effect, elevating him into the role he has served on an interim basis since July 2020. Its stock gained 1.9%.
  • Kimco Realty Corp. KIMannounced Thursday an agreement to buy Weingarten Realty Investors WRI in a cash and stock deal that values the owner of grocery-anchored shopping centers at about $3.9 billion. Kimco’s shares was up 2.3%, while Weingarten’s shares finished up over 12%.
  • Dell Technologies IncDELL shares closed up 6.7% after the computer maker said it was finally spinning off its majority stake of VMware Inc. VMW. VMware shares were flat.
  • TuSimple Holdings Inc. TSP, went public on Thursday, after the self-driving trucks maker’s initial public offering priced at $40 a share, above the expected range of between $35 and $39 a share

How are other assets faring?

  • The ICE U.S. Dollar Index a measure of the currency against a basket of six major rivals, was down 0.1%.
  • U.S. crude for May delivery  CL.1 climbed 31 cents, or 0.5%, to settle at $63.46 per barrel.
  • The 10-year Treasury note yield BX:TMUBMUSD10Y shed 10.6 basis points to 1.531%. Bond prices move inversely to yields.
  • Gold futures traded higher as bond yields slipped, with the June contract GCM21 rising $30.50, or 1.8%, to settle at $1,766.80 an ounce, its highest level in seven weeks.
  • In Europe, the Stoxx 600 index SXXP rose 0.5%, while London’s FTSE 100 UKX gained 0.6%.
  • In Asia, the Shanghai Composite SHCOMP fell 0.5%, Hong Kong’s Hang Seng HSI closed off 0.4%, and Japan’s Nikkei 225 NIK picked up less than 0.1%.
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