Stock Futures Tick Up After S&P 500 Record
Wall Street investors invested in economically sensitive stocks in reflation trade, driving the Dow Jones Industrial Average to a record high on Thursday. Copper flirted with a 10-year high as investors bet that the United States would lead a rapid global recovery from a pandemic, and aluminum prices moved closer to levels last seen in 2018. The Dow Jones rose 0.9%, the S & P 500 gained 0.8% and the Nasdaq Composite gained 0.4%.
Led by financial and industrial companies, US stocks rose on Thursday after a report showed the number of Americans filing new claims for unemployment benefits fell to 500,000 for the first time since the start of the COVID 19 pandemic, signalling that the labour market recovery has entered a new phase of a booming economy. The S & P 500 and Dow Jones Industrial Average rose to record highs as concerns about rising consumer prices eased.
However, the weak non-farm payrolls report led to strong trading in stocks, bonds and major currencies. In recent weeks, investors have bet that the Fed would be forced to tighten policy earlier than the central bank has outlined.
US President Joe Biden said in the report that the figures showed that the economy was not at risk of overheating and underscored the importance of the government’s economic measures. Stocks rebounded from a plunge in the previous session, triggered by news that President Joe Biden plans to push for a tax cut for Americans earning more than $1 million a year.
All major benchmarks suffered weekly losses, with the Nasdaq Composite (COMP) down 0.3% and the S & P 500 (SPX) down 1.5%. Only the Dow Jones closed with a slight loss, and both ended at their previous highs.
Stocks reacted with losses as traders looked at recent corporate earnings and mused on whether robust stimulus measures would be adopted. Cardillo said the spotlight will be on the spate of corporate profits this week as US Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke argue over the future of the Fed’s $2.5 trillion stimulus package.
The S & P 500 hit a one-day high before easing slightly, and the Nasdaq was little changed. The Dow has stabilized after its component Johnson & Johnson, the world’s second-largest pharmaceutical company, beat third-quarter profit estimates.
US stock futures were mostly steady after a salvo of gains from blue-chip companies. Parent company Verizon (VZ) fell after Yahoo Finance’s results, offsetting gains elsewhere.
F futures, which were pegged to the S & P 500, rose 0.1% after the benchmark stock posted its 22nd straight day of gains and closed at a record high last week. Futures on the Dow Jones Industrial Average, which also hit record highs, rose 0%, or 2%, while futures on the Standard & Poor’s 500 – which closed at a high on Thursday – rose 0.3%. The Dow Jones Industrial Average, which also hit record highs and had closed at record levels in recent weeks, was up 1.5% on Friday.
Shares of technology giants took control of the rally in US stocks on Thursday, pushing the major indexes to a series of all-time highs.
Stocks rose on expectations that easing inflationary pressures will keep interest rates low, while oil and gas prices jumped, with oil and gas companies such as Exxon Mobil Corp and Chevron Corp, operator of the largest US shale gas field, going public. This eased the concerns of those who own shares, which are sensitive to rising interest rates.
Australian shares hit their highest level in more than two years, buoyed by gains among miners, and shares in China rose 0.46 per cent. U.S. stock futures on the S & P 500 and Dow Jones Industrial Average rose 0.35%, while U.S. stock futures for U, S and S rose 1.5% and 1% to $24.00 by the close of trading on Wednesday, after rising $23.05 and $22.10, respectively, to their highest levels since March.
US payrolls data on Friday showed that employment growth unexpectedly slowed in April, giving stocks a boost and putting pressure on the dollar and US Treasury yields. The data, combined with data showing the economy is growing at a rapid pace, has pushed stocks higher this week. But investors were surprised by the size and speed with which they surprised investors.
Shares in Morgan Stanley fluctuated before the bell after the investment bank said first-quarter profit had doubled and became the latest Wall Street company to report a slump since the start of the year. Goldman Sachs Group Inc, JPMorgan Chase & Co and Bank of America Corp also reported quarterly results.
We saw the opposite today, there was some gain – the take, “said Michael O’Rourke, chief market strategist at Commonwealth Financial Group in New York.
The biggest decliners were the Russell 1000 Growth Index (RLG), which has outperformed the Russell 1000 Value Index (RLV) for the past two weeks in a row. Federal Reserve Chairman Jerome Powell said Sunday that the U.S. economy is on a growth trajectory that will gain momentum in the coming months, but that it risks further increases in interest rates and a slowdown in inflation. A recent slack in bond markets may be over, reigniting concerns about the impact of the Fed’s monetary stance on the stock market.
