By Mark DeCambre and Sunny Oh
The Dow and S&P 500 index closed at records on Thursday as economic reports affirmed a healthy economic recovery from the coronavirus pandemic, highlighted by retail sales surging in March after fiscal stimulus checks were paid to Americans while jobless benefit claims fell to a fresh low for the pandemic period.
Investors also parsed a crush of corporate quarterly results, including those from Bank of America and BlackRock.
How are stock benchmarks trading?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.82% gained 305.10 points, or 0.9%, to finish at 34,035.99, setting a new closing record and an intraday all-time high earlier in the session.
The S&P 500 index /zigman2/quotes/210599714/realtime SPX -1.10% added 45.76 points to reach 4,170.42, a gain of 1.1%, booking a new record.
The Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP -1.86% advanced 180.92 points, or 1.3%, to 14,038.76, topping the key 14,000 mark for the first time since February.
On Wednesday , the Dow closed up 53.62 points or 0.2% to 33,730.89, the S&P 500 finished 16.93 points or 0.4% lower at 4,124.66, while the Nasdaq Composite shed 138.26 points or 1% to close at 13, 857.84, off 1.7% from its Feb. 12 record high.
What’s driving the market?
A big day for corporate earnings reports and economic data lifted stocks to new records on Thursday, aided by a slide in long-term bond yields which benefited technology stocks in particular.
“Although 34,000 [in the Dow] by itself is just another number, this is a monumental feat when you think back to where we were last year at this time,” said Ryan Detrick, Chief Market Strategist for LPL Financial. “The speed and resiliency of this economic recovery is unlike anything we’ve ever seen and it helps to justify stocks at all-time highs.”
U.S. retail sales surged almost 10% in March thanks to $1,400 stimulus checks paid to consumers by the federal government. Sales climbed 9.8% last month, the government said Thursday. Economists polled by Dow Jones and The Wall Street Journal had forecast a 6.1% increase.
Adding to the market’s optimism, weekly jobless benefit claims fell to a pandemic-era low. U.S. unemployment claims sank by 193,000 in the week of April 10, an unusually large decline that likely reflects both an improving economy but also continuing problems in processing applications for jobless benefits. Initial jobless claims filed traditionally through the states declined to a seasonally adjusted 576,000 from 769,000 in the prior week.
“Stellar jobless claims plus off the charts retail sales packs a positive one two punch and sends strong signals that the economy is full steam ahead toward recovery,” wrote Mike Loewengart, managing director at E-Trade Financial.
U.S. industrial production also rose 1.4% in March, after a revised 2.6% fall in the prior month that was caused by severe winter weather, the Federal Reserve said Thursday.
Investors also were poring over a first-quarter report from Bank of America Corp. /zigman2/quotes/200894270/composite BAC +0.94% after its profits more than doubled profit and beat expectations , citing strong growth in capital markets and lower credit costs. The bank also announced a $25 billion stock repurchase program.
Quarterly results from PepsiCo /zigman2/quotes/208744353/composite PEP -0.59% , Citigroup /zigman2/quotes/207741460/composite C +1.07% , BlackRock /zigman2/quotes/207946232/composite BLK -1.04% and Delta Air Lines /zigman2/quotes/200327741/composite DAL -1.50% , were also being digested, a day after Goldman Sachs Group /zigman2/quotes/209237603/composite GS +0.49% and JPMorgan Chase /zigman2/quotes/205971034/composite JPM +0.74% delivered solid results.
Beyond earnings reports and economic data, some analysts said that investors may becoming more entrenched in thinking that the Federal Reserve will keep interest rates low and liquidity measures in place, despite rising inflation, to continue to stimulate the COVID-stricken economy.