Gains in Microsoft, Amazon and Alphabet helped the S&P 500 jump past the 4,000 point mark for the first time ever on Thursday as optimism about a recovering US economy persists.
Microsoft, Amazon, Alphabet and Nvidia increased by 1% or more, with a large number of growth stocks showing signs of awakening once again after falling in recent weeks behind so-called value stocks expected to outperform as the economy recovers from the coronavirus pandemic.
Despite surprising news last week of the number of Americans filing new claims for unemployment benefits increasing, some measures of manufacturing activity soared to their highest levels in more than 37 years in March, with employment at factories the highest since February 2018.
In afternoon trading, the Dow Jones Industrial Average was up 0.5% at 33,145.88 points, while the S&P 500 gained 0.95% to 4,010.77.
The Nasdaq Composite increased by 1.48% to 13,442.31.
After breaking the 4000-point barrier for the first time, the S&P 500 was up about 7% in 2021 and has gained about 80% from its low in March 2020.
“We’re still bullish for this year, and we think that with stimulus, with the Fed committed to being dovish, with the economy reopening due to more of the U.S. getting vaccinated, overall you’re going to see corporate earnings do pretty well,” said King Lip, chief investment strategist at Baker Avenue Asset Management in San Francisco.
The Nasdaq remained about 5% below its February record high close, still smarting as higher U.S. bond yields hurt technology stocks.
Nine of the 11 major S&P sectors rose, with technology, communication services and energy gaining more than 1%.
US automakers this week reported a rebound in first-quarter sales from the struggles that the coronavirus pandemic caused last year, but numbers were not quite as good as expected due to a global chip scarcity that meant many companies were forced to halt production.
The Covid-19 pandemic has boosted sales overall for automakers as more people choose to travel by their own cars rather than using public transportation.
However, chip shortages and extreme winter weather across the south west throughout February resulted in automakers having to close factories, ensuring analysts remain cautious about the speed of the sector’s recovery over the next year.
General Motors Co reported that its first-quarter U.S. sales rose 4% to 642,250 vehicles, helped initially by an increase in demand for its Escalade sport utility vehicles and Encore subcompact crossover SUVs.
“Sales are off to a strong start in 2021, we are operating our truck and full-size SUV plants at full capacity and we plan to recover lost car and crossover production in the second half of the year where possible,” said Steve Carlisle, GM executive vice president.
GM, the number one automaker in the US, said it estimates that the seasonally adjusted annual sales pace for the first quarter of the year was around 16.7 million units.
Japan’s Nissan Motor Co said its U.S. sales rose nearly 11% to 285,553 vehicles in the quarter, while South Korea’s Hyundai Motor’s U.S. sales jumped about 28% to 167,130 vehicles.
Deliveroo’s recent London IPO struggles have left a sour taste in the mouths of a large portion of its customer base.
A number of amateur traders were swayed by Deliveroo’s regular updates and offers regarding its IPO, but investors are nursing losses after Deliveroo shares plunged as much as 30% on their London Stock Exchange debut on Wednesday.
The early fall, which has sliced 2 billion dollars off initial valuations, is being regarded as a blow to Britain’s ambitions of attracting fast-growing tech companies to London.
The outlook appeared bleak for Deliveroo even before the IPO, with several asset managers shunning it because of complaints over gig-economy working conditions, as well as Deliveroo’s corporate governance.
“I took a gamble,” London-based amateur trader Amy Lee told Reuters. “It was my own fault, but I think I was swayed by the thought ‘surely Deliveroo wouldn’t advertise a bad product to their customers through their app. That would be stupid right?’”
One Londoner who bought 295 pounds of Deliveroo stock said the company’s sales team seemed to have “bent over backwards” to turn diners into investors.
“Every time you placed a Deliveroo order they flashed a sign. They let me invest even without a brokerage account. They said we will open up a Lloyds (bank) account for you and do it for you, (for) a one-off fee of 5 pounds. They made it super helpful,” he said, requesting anonymity.
Asked for comment, a Deliveroo spokesperson said: “Although the trading started lower than we would have liked, we are just starting life as a public company and we are confident that our winning proposition will deliver long term value for all shareholders.”
“We thank each of our customers who took part in our customer offer and will work tirelessly for them each and every day.”