Baystreet.ca – Equities Reach New Heights
US stocks hit record highs on Monday, as a strong rebound in US job growth and strong data in the services sector raised expectations of a rapid economic recovery from the pandemic.
The Dow Jones Industrials shouted higher by 373.98 points, or 1.1%, to conclude Monday at another all-time high of 33,527.19.
The S&P 500 added 58.04 points, or 1.4%, to 4,076.99, hitting a new record after closing above 4,000 for the first time on Thursday.
The NASDAQ Composite climbed 225.48 points, or 1.7%, to 13,705.59.
Tesla shares jumped more than 4% as the electric vehicle company reported production and delivery figures that far exceeded expectations.
GameStop shares cut losses to double digits and closed about 2% after the video game retailer said it could sell up to $ 1 billion in shares.
Classic reopening games like airlines and cruise lines outperformed. Delta Airlines and United jumped more than 2% each, while Carnival rose 4.7% and Norwegian Cruise Line gained 7.2%.
The US Department of Labor reported Friday that non-farm payrolls rose 916,000 in March, the highest since last August, while the unemployment rate fell to 6%. Economists polled by Dow Jones expected an increase of 675,000 and an unemployment rate of 6%.
Meanwhile, a measure of US service sector activity hit an all-time high in March. The Institute for Supply Management’s non-manufacturing activity index rose to 63.7 last month, the highest level in survey history.
The stock market is building on its recent strength after President Joe Biden presented his multibillion-dollar infrastructure proposal, which focuses on rebuilding roads, bridges and airports, expanding the broadband access and increased use of electric vehicles and updating of the country’s electricity grid. The plan will be funded in part by raising the corporate tax rate to 28%.
Treasury Secretary Janet Yellen is reportedly pushing for a global minimum tax on Monday in an attempt to prevent companies from moving to find lower rates. Yellen will be speaking at a Chicago Council on Global Affairs conference this morning.
However, Biden’s plan faces opposition from Republicans, as the $ 2 trillion plan includes initiatives they believe extend beyond traditional infrastructure issues.
Republican Senator Roy Blunt of Missouri on Sunday urged the Biden administration to reduce the package to around $ 615 billion and focus on physical infrastructure such as roads and airports.
Senate Minority Leader Mitch McConnell said last week that Biden’s plan would not receive Republican support and vowed to oppose the broader Democratic agenda.
On the pandemic front, the United States on Saturday reported another daily record for new COVID vaccinations, pushing the weekly average of new vaccines per day above three million.
10-year Treasury bill prices fell, taking yields to 1.71% from 1.68% on Thursday. Treasury prices and yields move in opposite directions.
Oil prices slipped from $ 2.67 to US $ 58.78 per barrel.
Gold prices gained 50 cents to $ 1,728.90.