S&P 500 hits 4,000 on tech power, recovery optimism

By Devik Jain and Medha Singh (Reuters) - The S&P 500 breached the 4,000 mark for the first time on Thursday, powered by gains in technology shares and optimism about a pickup in global economic activity. A mammoth vaccination drive and a massive fiscal stimulus are expected to drive a recovery in the labor market, prompting investors to look past latest data that showed a rise in the number of Americans filing new claims for jobless benefits last week.

Reuters April 02, 2021 00:07:16 IST
S&P 500 hits 4,000 on tech power, recovery optimism

SP 500 hits 4000 on tech power recovery optimism

By Devik Jain and Medha Singh

(Reuters) - The S&P 500 breached the 4,000 mark for the first time on Thursday, powered by gains in technology shares and optimism about a pickup in global economic activity.

A mammoth vaccination drive and a massive fiscal stimulus are expected to drive a recovery in the labor market, prompting investors to look past latest data that showed a rise in the number of Americans filing new claims for jobless benefits last week.

The closely watched monthly jobs report on Friday could show the U.S. economy added 647,000 jobs in March, on top of a 379,000 increase in February.

The 4,000 level "could be a possible inflection point where it renews confidence that this bull cycle is not over and that equities can remain resilient in the face of heightened interest rates and perhaps a not as extremely accommodative Fed policy," said Matt Hanna, portfolio manager at Summit Global Investments.

It took the benchmark index about a year-and-a-half to close the 1,000-point gap to 4,000, compared with about five years from 2,000 to 3,000 points.

The blue-chip Dow is just 1% shy off a record high. The Nasdaq, however, is about 5% below its all-time high as a rapid rise in U.S. bond yields accelerated a rotation from richly-valued tech stocks to underpriced economy-linked stocks.

Seven of the 11 major S&P sectors rose, with technology, communication services and energy gaining more than 1%.

"April is usually a pretty good month for the market historically and I would expect that momentum to continue especially as we see the economy strengthen," said Larry Adam, chief investment officer at Raymond James.

Micron Technology Inc jumped 4.6% after the chipmaker forecast fiscal third-quarter revenue above Wall Street estimates due to higher demand for memory chips, thanks to 5G smartphones and artificial intelligence software.

U.S.-listed shares of rival Taiwan Semiconductor rose 3.8% on its plan to invest $100 billion over the next three years to meet the rising chip demand.

The technology-heavy Nasdaq jumped 1.48% as "high flying" stocks including Amazon.com Inc, Apple Inc, Alphabet Inc, Microsoft Corp and Facebook Inc added between 1.1% and 2.4%. At 10:34 a.m. ET, the Dow Jones Industrial Average was up 123.69 points, or 0.38%, at 33,105.24, the S&P 500 was up 33.86 points, or 0.85%, at 4,006.84.

The three main indexes are set to close out a holiday-shortened week with gains, led by Nasdaq. U.S. stock markets will remain shut for Good Friday holiday.

The CBOE volatility index slipped below 18 points for the first time in 14 months, a level last seen before the coronavirus -driven global financial market meltdown in March 2020.

Johnson & Johnson fell 0.5% after the drugmaker said it had found a problem with a batch of the drug substance for its COVID-19 vaccine being produced by Emergent Biosolutions, whose shares tumbled 14%.

Advancing issues outnumbered decliners by a 2.80-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 2.0-to-1 ratio on the Nasdaq.

The S&P index recorded 20 new 52-week highs and no new lows, while the Nasdaq recorded 99 new highs and 22 new lows.

(Reporting by Devik Jain and Medha singh in Bengaluru; Editing by Arun Koyyur)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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