After a year like 2020, in which nearly all stocks reached previously unprecedented lows, many investors could not flip their calendars fast enough come January 1st. While changing dates did not necessarily change stock prices or the severity of the pandemic, fortunately, many stocks have rebounded in a big way in the second quarter of 2021. That trend continued this past week, as the S&P 500 and Dow Jones Industrial Average continued their relentless uphill climb amidst a country undergoing large-scale economic recovery.
The past week’s surge on the Dow is primarily attributed to strong earnings reports from a bevy of blue-chip companies, as the 30-stock index surged past the 34,000 mark for the first time in its history. According to the Commerce Department, a rebound in the consumer and retail spending markets is a driving force behind the Dow’s unprecedented boom, as additional stimulus payments drove retail sales up 9.8% in the month of March. Jobless claims are also the lowest they have ever been in the pandemic era, as the Labor Department reported 576,000 new jobless claims for the week ended April 10th. With its close on Friday, the Dow has already achieved four “1,000 point” milestones this year, which is already the most it has had since 2017, a year in which the index achieved five such milestones.
The S&P rose 15.05 points to 4,185.47 at closing last Friday, largely due to the unforeseen increase in consumer spending nationwide. Pfizer was one of the biggest winners in the index’s healthcare sector, as the pharmaceutical company notched a 2.6% gain on Friday. Additionally, homebuilder stocks saw a spike on the heels of a frigid February due to an uptick in building permits; in response, D.R. Horton jumped 3.6%, and KB Home gained 3.3% on the day.
On the earnings side of the index, paint and coatings maker PPG Industries soared 8.7% after exceeding expectations, and J.B. Hunt Transport Services rose 1.4% after posting stellar financial results. Banks also soared as bond treasury yields rose from 1.53% to 1.59% late Thursday afternoon, and while the treasury yield is not quite as high as the 1.75% it was earlier in the year, banks benefitted, nonetheless. As more Americans line up to get vaccinated and the federal reserve and U.S. government continue to stimulate trade, there are expectations for solid corporate profit growth as businesses re-open and Americans return to normal living once again.
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