Stocks overcame a midday stumble on Wall Street to close broadly higher Thursday, driving the Standard & Poor’s 500 to another record high.
The benchmark index rose 0.7% after having been down 0.2% earlier. Communications companies helped power a big part of the gain, led by a sharp rise in Facebook after the company’s latest quarterly report card. Banks also helped lead the rally, outweighing a pullback in healthcare and technology stocks. Treasury yields were mixed.
Investors weighed the latest batch of company earnings reports and encouraging economic data. A report showing that the U.S. economy grew sharply in the first quarter is among the latest data pointing to an economic recovery from the recession brought on by the pandemic. Other upbeat reports included data showing that more Americans signed contracts to buy homes in March after two months of declines.
The S&P 500 index rose 28.29 points to 4,211.47. The index also hit an all-time high Monday. The Dow Jones industrial average added 239.98 points, or 0.7%, to 34,060.36, while the Nasdaq composite gained 31.52 points, or 0.2%, to 14,082.55. Both indexes had also been in the red earlier in the day.
Smaller company stocks, which have been outperforming the broader market this year, gave back some of their recent gains. The Russell 2000 index lost 8.70 points, or 0.4%, to 2,295.46.
The rollout of COVID-19 vaccinations, massive support from the U.S. government and the Federal Reserve, and increasingly positive economic data have been driving expectations for a strong rebound for the economy and robust corporate profit growth this year. That’s helped stocks push higher and kept indexes near their all-time highs.
So far, company earnings for the first three months of the year have largely exceeded Wall Street’s expectations and stoked bullish profit outlooks for 2021.
Facebook jumped 7.3% after the social media giant reported stronger-than-expected results for the first quarter, thanks to soaring ad revenue.
That followed an overnight dose of big technology earnings from the likes of Apple and Qualcomm. Tech stocks drove much of the rally in 2020 and are still highly valued by investors, who are betting that the pandemic made a permanent shift in how Americans shop and entertain themselves.
Amazon.com reported after the close of regular trading that its profit more than tripled in the first quarter. Its shares jumped 4.2% in after-hours trading.
Automakers fell sharply after Ford warned that a worsening global computer chip shortage could cut its production in half during the current quarter. Ford dropped 9.4% and General Motors fell 3.4%.
Ride-sharing and delivery service companies also dropped after a report that Labor Secretary Marty Walsh wants gig workers to be classified as employees. DoorDash fell 7.6%, Uber lost 6% and Lyft sank 9.9%.
On the economic front, the Commerce Department said the U.S. economy grew at a brisk 6.4% annual rate in the last quarter. That acceleration is expected to increase through the summer as more vaccinations are administered and COVID-19 cases continue to fall. Meanwhile, the Labor Department said the number of Americans who filed for unemployment benefits fell again last week.
In his speech Wednesday evening, President Biden ticked off details of some of his plan for $1.8 trillion in spending to expand preschool, create a national family and medical leave program, distribute child care subsidies and more.
The plan comes on top of his proposal for $2.3 trillion in spending to rebuild roads and bridges, expand broadband access and launch other infrastructure projects.
The strong economic reports helped nudge some bond yields higher. The yield on the 10-year Treasury note rose to 1.64% from 1.62% on Wednesday.