S&P 500 Reaches Record High Above 4,000 As Tech Stocks Extend Rally

With technology stocks leading the way higher once again, stocks are adding to yesterday’s gains in morning trading on Thursday. The continued upward move has lifted the S&P 500 to a new record intraday high above 4,000.

Currently, the Nasdaq is up 219.27 points or 1.7 percent at 13,466.14 and the S&P 500 is up 31.03 points or 0.8 percent at 4,003.92.

The narrower Dow is once again underperforming its counterparts but is currently up 66.38 points or 0.2 percent at 33,047.93.

The extended rally by technology stocks, as reflected by the jump by the tech-heavy Nasdaq, is partly in reaction to upbeat news out of the semiconductor sector.

Shares of Micron Technology (MU) has surged up by 5.5 percent after the chipmaker reported better than expected fiscal second quarter results and provided upbeat guidance for the current quarter.

Taiwan Semiconductor (TSM) has also shown a strong move to the upside after unveiling capacity expansion plans amid rising chip demand.

Tech stocks have also benefited from a pullback by treasury yields, with the yield on the benchmark ten-year note moving notably lower after ending the previous session at its highest closing level in over a year.

Positive sentiment may also have been generated in reaction to a report from the Institute for Supply Management showing the pace of growth in U.S. manufacturing activity accelerated by much more than anticipated in the month of March.

The ISM said its Manufacturing PMI jumped to 64.7 in March from 60.8 in February, with a reading above 50 indicating growth in manufacturing activity. Economists had expected the index to inch up to 61.3.

With the much bigger than expected increase, the Manufacturing PMI reached its highest level since hitting 69.9 in December of 1983.

Meanwhile, the Labor Department released a report showing first-time claims for U.S. unemployment benefits rebounded from their lowest level in a year in the week ended March 27th.

The report said initial jobless claims rose to 719,000, an increase of 61,000 from the previous week’s revised level of 658,000.

Economists had expected jobless claims to edge down to 680,000 from the 684,000 originally reported for the previous week.

The downwardly revised number of claims in the previous week was the lowest since the week ended March 14, 2020, just before the start of the coronavirus lockdowns.

Traders are also reacting to President Joe Biden’s speech regarding his $2 trillion infrastructure and economic recovery plan.

The massive proposal, which would partly paid for by higher corporate taxes, is likely to face intense opposition from Republicans.

Semiconductor stocks are extending the rally seen in the previous session, with the Philadelphia Semiconductor Index surging up by 2.9 percent to its best intraday level in over a month.

Software, biotechnology and networking stocks are also seeing considerable strength, contributing to the continued spike by the tech-heavy Nasdaq.

Significant strength has also emerged among gold stocks, as reflected by the 2.8 percent jump by the NYSE Arca Gold Bugs Index.

The rally by gold stocks comes amid an increase by the price of the precious metal, with gold for June delivery climbing $12.20 to $1,727.80 an ounce.

Energy stocks are also seeing notable strength in morning trading, while steel stocks are bucking the uptrend after moving sharply higher on Wednesday.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan’s Nikkei 225 Index advanced by 0.7 percent, while Hong Kong’s Hang Seng Index spiked by 2 percent.

The major European markets have also moved to the upside on the day. While the U.K.’s FTSE 100 Index has risen by 0.4 percent, the French CAC 40 Index is up by 0.6 and the German DAX Index is up by 0.7 percent.

In the bond market, treasuries have rebounded after coming under pressure late in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 6 basis points at 1.686 percent.