Reuters, April 9-The US stock market S&P 500 Index and the Dow Jones Industrial Index both hit record closing highs on Friday. The weekly gains were for the third consecutive week, partly due to the boost brought by growth stocks. The corporate quarterly earnings season will kick off next week.
Growth stocks have underperformed value stocks for most of this year, but have gained a firm foothold in the past two weeks. The 10-year U.S. Treasury bond yield fell from a 14-month high reached at the end of March, spurring growth stock buying.
The U.S. Producer Price Index (PPI) rose more than expected in March, recording the largest annual increase in nine and a half years.
Many investors now expect that inflation will rise as vaccination helps the US economy recover from the effects of the blockade, but the stock market has not expressed much concern because the Federal Reserve (Fed/FED) has repeatedly stated that it will allow Inflation rose above the target.
Ken Polcari, managing partner of Kace Capital Advisors, said: “This is why (Powell) has been chattering throughout the week. He wants to make sure that everyone understands that they expect prices to rise and are prepared. This is not surprising. .”
“This is the reason why the market did not fall, because he successfully eliminated people’s anxiety through speech, so that people did not really panic due to this.”
The Dow Jones Industrial Average rose 297.03 points, or 0.89%, to 33,800.6 points; the S&P 500 index rose 31.63 points, or 0.77%, to 4,128.8 points; the Nasdaq index rose 70.88 points, or 0.51%, to 13,900.19 points.
This week, the S&P index rose 2.71%, the Dow rose 1.96%, and the Nasdaq index rose 3.12%.
Banking stocks will kick off the first quarter earnings next week, and Goldman Sachs, JPMorgan Chase and Wells Fargo will release earnings on Wednesday. According to Refinitiv IBES data, analysts expect the profits of S&P 500 index companies to increase by 25% over the same period last year, which will be the strongest first-quarter performance since 2018.
Companies with large market capitalizations such as Apple, Amazon, and Microsoft included in the growth index rose in line with the S&P 500 index. Amazon shares rose 2.21% after Alabama warehouse workers refused to form a union.
The Russell 1000 Growth Stock Index, which is mainly composed of technology stocks, outperformed the value stock index, which is mainly composed of cyclical stocks such as financial stocks and energy stocks, for the second consecutive week, after the yields of longer-term government bonds fell.
The weekly flow data released by Bank of America on Friday showed that investors have invested more in the stock market in the past five months than in the past 12 years.
Honeywell rose 3.24%, giving the Dow a boost, as Jefferies and JP Morgan raised the US aerospace parts manufacturer’s stock target price.
The total trading volume of US stock exchanges was 8.69 billion shares, and the average daily trading volume for the past 20 complete trading days was 11.71 billion shares. (Finish)
Compile Gao Sijia/Liu Jing; Review Gao Sijia/Mother Red