S&P 500 scales new record high on tech boost

(Reuters) – The S&P 500 hit a record high on Thursday and the Nasdaq was at a seven-week peak, helped by gains in tech-related stocks, a day after the Federal Reserve reiterated its pledge to remain ultra-dovish until the economic recovery is more secure.

FILE PHOTO: People are seen on Wall St. outside the New York Stock Exchange (NYSE) in New York City, U.S., March 19, 2021. REUTERS/Brendan McDermid/File Photo

Apple Inc, Microsoft Corp, Alphabet Corp and Amazon.com Inc rose between 1% and 1.5% and were among the top boosts to the benchmark S&P 500.

High-growth tech stocks have recovered in recent sessions as U.S. 10-year bond yield backed off from its 14-month highs, pushing the tech-heavy Nasdaq within 2% of its record closing high.

Latest data showed the number of Americans filing new claims for unemployment benefits unexpectedly rose last week, but the increase likely understates the rapidly improving labor market conditions.

“While states balance the vaccine rollout with stop and start reopening plans, the labor market continues to feel the heat,” said Mike Loewengart, managing director of investment strategy at E*TRADE Financial.

“But the disappointing read actually puts some firepower behind the Fed’s accommodative stance.”

The Fed acknowledged the economy was on its path to a strong rebound backed by massive fiscal spending and accelerating vaccinations, minutes released on Wednesday showed. However, the central bank noted it would be “some time” before conditions improve enough for the Fed to rein in its support.

Fed Chair Jerome Powell will speak at a virtual International Monetary Fund event at 1200 ET (1600 GMT).

The tech sector hit a record high, while economy-linked financials, industrials and energy fell the most among major S&P sectors.

The Russell 1000 growth index, which consists of tech-related stocks, gained about 1% while its value counterpart, comprising mostly financials and energy names, dropped about 0.4%.

At 10:05 a.m. ET the Dow Jones Industrial Average fell 77.73 points, or 0.23% , to 33,368.53, the S&P 500 gained 5.80 points, or 0.14%, to 4,085.75 and the Nasdaq Composite gained 106.30 points, or 0.78%, to 13,795.14.

The first-quarter earnings season begins in earnest next week with results from big U.S. banks. Analysts have raised expectations for first-quarter S&P 500 earnings increase to 24.2%, according to Refinitiv IBES data as of April 1, versus 21% forecast on Feb. 5.

“The next big catalyst for the markets will be earnings,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

“This is going to be an important earnings season as it is the first quarter in comparison to a full year of the pandemic.”

The so-called “meme stock” GameStop Corp rose 4.5% after the company said it intends to elect activist investor Ryan Cohen as chairman, putting him in the driver’s seat as he looks to transform the videogame retailer.

Tesla Inc edged 1.4% higher on the Joe Biden administration’s $174 billion proposal to boost electric vehicles.

U.S. shares of Canopy Growth Corp dropped about 3% on a deal to buy rival Supreme Cannabis Co Inc for C$323.3 million ($256.9 million), as the world’s biggest cannabis producer bolsters its portfolio to tap surging demand.

Declining issues outnumbered advancers by a 1-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.2-to-1 ratio on the Nasdaq.

The S&P 500 posted 28 new 52-week highs and one new low, while the Nasdaq recorded 80 new highs and 11 new lows.

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