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America bounces back: US stocks climb to record highs as jobless claims plummet to lowest level since pandemic began and consumer spending surges

 U.S. stocks climbed to records on Thursday after encouraging data showed a surge in consumer spending and the lowest level of new unemployment claims since the pandemic began.

Coupled with rapid vaccinations and hopes of a return to normal, the upbeat data provided another opportunity for investors to pile into high-flying technology stocks that took a beating recently. 

In morning trading, the Dow Jones Industrial Average was up 252 points, or 0.79 percent, at a record-high 33,996.83. The S&P 500 also touched new records at 4,162.40, up 0.91 percent.


The Nasdaq composite was up 1.1 percent at 11.18am but remained just below February's record high.  

he Dow Jones was on pace for a record on Thursday after positive economic data

he Dow Jones was on pace for a record on Thursday after positive economic data


Top U.S. banks kicked off first-quarter reporting season on Wednesday, with Goldman Sachs Group Inc, JPMorgan Chase and Wells Fargo posting bumper results.


'With equities lingering near a record, investors are looking to the earnings season for further catalysts,' said Art Hogan, chief market strategist at National Securities in New York.

'Expectations of a strong profit rebound have helped markets rally, setting the bar high as reporting gets underway.'

BlackRock Inc, the world's largest asset manager, gained 2.3 percent after reporting a 16 percent jump in first-quarter profit, while PepsiCo Inc edged 0.5 percent higher after it forecast a pickup in organic revenue growth in the second quarter. 

Expectations are very high on Wall Street that the economy - and thus corporate profits - are in the midst of exploding out of the cavern created by the pandemic, amid COVID-19 vaccinations and massive stimulus from the U.S. government and Federal Reserve

Report after report on Thursday only bolstered those expectations further.

One report showed that sales at U.S. retailers jumped 9.8 percent in March from February, blowing past economists´ forecasts for 5.5 percent growth. 

Much of the surge was due to $1,400 payments from the U.S. government´s latest economic rescue effort hitting households´ bank accounts. 

Economists said it shows how primed people are to spend as the economy reopens and conditions brighten. That's huge for an economy that's made up mostly of consumer spending.

Another report gave an encouraging read on the job market, showing 576,000 people applied for unemployment benefits last week. 

The New York Stock Exchange is seen in a file photo. Stocks are opening higher on Wall Street as traders welcome some strong reports on the economy including a drop in jobless claims and a big increase in retail spending, as well as more robust earnings from big companies

The New York Stock Exchange is seen in a file photo. Stocks are opening higher on Wall Street as traders welcome some strong reports on the economy including a drop in jobless claims and a big increase in retail spending, as well as more robust earnings from big companies

That's well below the 700,000 that economists had forecast and down from 769,000 the prior week. It's also the lowest the number has been since the pandemic.

Adding to the optimism, more big U.S. companies reported even healthier profits for the first three months of 2021 than analysts had forecast. 

Expectations are already high for this earnings reporting season, which unofficially got underway on Wednesday and could result in the strongest growth in more than a decade. 

Shares of Apple, Microsoft, Facebook and Amazon rose between 1.1 percent and 2.0 percent, taking the S&P technology sector to the top of pack in early trading. 

Even Delta Air Lines, which reported weaker results for the start of 2021 than expected, highlighted areas of optimism. It said it could return to making profits by late summer if the recovery it´s seeing in air travel continues. Its shares fell 2.9 percent.

The newly-listed cryptocurrency exchange Coinbase added 2.4 percent, a day after going public in a high-profile debut on the Nasdaq that briefly valued it at more than $100 billion. 

With growth expectations so high, some investors are worried about the possibility that inflation could be set to swing upward and stay high. 

If it were to sustain itself, high inflation could send bond prices tumbling, hurt corporate profit margins and trigger volatility across markets worldwide.


U.S. Treasury remained notably subdued following Thursday morning´s stronger-than-expected reports, and longer-term yields actually fell to the surprise of some analysts. The yield on the 10-year Treasury dropped to 1.59 percent from 1.63 percent late Wednesday. 

It's reminiscent of what happened earlier this week, when a report on the Consumer Price Index came in higher than expected. 

It would have made sense if the worse-than-expected inflation report had caused investors to send bond yields higher, but they largely shrugged it off.

The subdued reactions may be a result of how unpredictable data can be as the pandemic and government efforts to counteract it distort everything. And, for now at least, the numbers seem to be pointing toward more strength.

'While we haven't necessarily seen the market move on strong economic beats or misses, it´s certainly a step in the right direction,' said Mike Loewengart, managing director of investment strategy at E-Trade Financial.

In European stock markets, Germany's DAX returned 0.3%, and France's CAC 40 rose 0.4%. The FTSE 100 in London gained 0.6%.

In Asia, Japan's Nikkei 225 rose 0.1%, South Korea's Kospi gained 0.4% and Hong Kong's Hang Seng slipped 0.4%. Stocks in Shanghai fell 0.5%.

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