Stocks surge to record with aid deluge imminent
U.S. stocks jumped to an all-time high, powered by a renewed rally in tech shares as investors eye a $1.9 trillion spending injection from the federal government.
The S&P 500 reclaimed a record in a broad rally led by tech and consumer discretionary shares. The Nasdaq 100 Index surged more than 2.5% as it continued to rebound from a rout that had taken it 11% below its February record. Chipmakers paced the tech advance. Twitter Inc. jumped 5.7%, while Tesla Inc. continued its recovery. Korean e-commerce giant Coupang Inc. popped 41% in its market debut. Verizon Communications Inc. saw surging demand for its $25 billion debt sale.
The 10-year Treasury yield pared an increase after an auction of 30-year notes. Jobless claims fell more than forecast, signaling labor-market momentum as President Joe Biden signed the bill Thursday ahead of a prime time address to the nation. The dollar slumped versus major peers.
"The administration has slipped a little bit of extra fuel to the equity markets with their bill. It's going to be rocket fuel," said Chris Gaffney, president of world markets at TIAA Bank. "We're headed to new highs because of all that stimulus money that's being put out there and it's more broad-based than the first couple stimulus programs."
Risk assets resumed their broad rally with vaccinations rolling out around the world and the U.S. poised to notch economic growth not seen since the 1980s. Concern that explosion would deliver a bout of inflation eased after Wednesday's weaker-than-expected report on consumer prices, while Thursday's report on jobless claims showed plenty of slack in the labor market.
Elsewhere in markets, German 10-year bond yields declined and the Stoxx 600 Index gained after the European Central Bank indicated it will step up the pace of bond purchases. Copper climbed above $9,000 a ton in London and oil advanced.
Meanwhile, the ECB pledged to ramp up its buying of government debt in coming months in a bid to a contain rising bond yields that threaten to derail the region's economic recovery. While policymakers are now committing to front load purchases, they still kept the overall size of the $2.2 trillion (1.85 trillion-euro) pandemic bond-buying program unchanged.
These are the main moves in markets:
Stocks
- The S&P 500 Index gained 1% as of 4 p.m. EST.
- The Stoxx Europe 600 Index increased 0.5%.
- The MSCI Asia Pacific Index rose 1.7%.
- The MSCI Emerging Market Index rose 2.7%.
Currencies
- The Bloomberg Dollar Spot Index sank 0.55%.
- The euro rose 0.5% to $1.1990.
- The British pound gained 0.4% to $1.3993.
- The Japanese yen was little changed at 108.43 per dollar.
Bonds
- The yield on 10-year Treasurys was little changed at 1.52%.
- The yield on two-year Treasurys dipped one basis point to 0.14%.
- The 30-year rate rose to 2.27%.
- Germany's 10-year yield fell two basis points to -0.334%.
Commodities
- West Texas Intermediate crude gained 2.5% to $65.05 a barrel.
- Gold futures were little changed at $1,721.30 an ounce.
