S&P 500 Jumps To New Record Closing High Above 4,000

Stocks showed a strong move to the upside during trading on Thursday, with technology stocks helping to lead the way higher once again. With the upward move, the S&P 500 ended the session at a new record closing high above 4,000.

The major averages all closed firmly positive, although the tech-heavy Nasdaq posted a particularly strong gain. The Nasdaq soared 233.24 points or 1.8 percent to 13,480.11, while the S&P 500 jumped 46.98 points or 1.2 percent to 4,019.87 and the Dow climbed 171.66 points or 0.5 percent to 33,153.21.

The extended rally by technology stocks, as reflected by the spike by the Nasdaq, was partly in reaction to upbeat news out of the semiconductor sector.

Shares of Micron Technology (MU) surged up by 4.8 percent after the chipmaker reported better than expected fiscal second quarter results and provided upbeat guidance for the current quarter.

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

Tech stocks 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 was also 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.

On Friday, the Labor Department is scheduled to release its more closely watched monthly employment report for March.

Economists currently expect employment to jump by 647,000 jobs in March after climbing by 379,000 jobs in February. The unemployment rate is expected to drop to 6.0 percent from 6.2 percent.

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

Sector News

Gold stocks moved sharply higher over the course of the session, driving the NYSE Arca Gold Bugs Index up by 4.4 percent.

The rally by gold stocks came as the price of gold for June delivery climbed $12.80 to $1,728.40 an ounce, extending the rebound seen in the previous session.

Substantial strength was also visible among semiconductor stocks, as reflected by the 3.7 percent spike by the Philadelphia Semiconductor Index.

Oil stocks also showed a significant move to the upside on the day, with the NYSE Arca Oil Index surging up by 3.3 percent. The strength in the sector came as the price of crude oil for May delivery spiked $2.29 to $61.45 a barrel.

Software, brokerage and commercial real estate stocks also saw considerable strength, moving higher along with most of the other major sectors.

Other Markets

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 also moved to the upside on the day. While the U.K.’s FTSE 100 Index rose by 0.4 percent, the French CAC 40 Index and the German DAX Index climbed by 0.6 percent and 0.7 percent, respectively.

In the bond market, treasuries 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, slid 6.7 basis points to 1.679 percent.

Looking Ahead

Reaction to the monthly jobs report is likely to drive trading early next week, although reports on service sector activity, factory orders, the U.S. trade deficit, and producer prices may also attract attention.

The Federal Reserve is also scheduled to release the minutes of its latest monetary policy meeting, which may shed additional light on the Fed’s economic outlook.

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