Friday 9 April 2021 8:25 pm

S&P 500 and Dow climb for third day and close at records

The S&P 500 and the Dow rose to close at record highs, posting a third straight weekly rise partly on lift from growth stocks, with a late-day rally building gains ahead of quarterly earnings season next week.

The Dow Jones Industrial Average rose 299.21 points, or 0.89 per cent, to 33,802.78, the S&P 500 gained 31.58 points, or 0.77 per cent, to 4,128.75 and the Nasdaq Composite added 70.88 points, or 0.51 per cent, to 13,900.19.

All three major U.S. stock indexes were on track to post weekly gains as upbeat economic data boosted risk appetite ahead of first-quarter earnings.

Wall Street gained ground on Friday after solid US inflation data and an uptick in Treasury yields suggested the economic recovery from the pandemic recession was gaining momentum.

Financial stocks rose 0.9 per cent, more than any other S&P sector, with Bank of America, Citigroup and JPMorgan Chase & Co rising between 0.8 and 1.1 per cent.

Transports, seen as a proxy for economic health, were on track for their 10th straight weekly advance.

Read more: Bulls in control after dovish Fed as attention shifts to Bank of England today

Weaker-than-expected labor market data on Thursday eased inflation worries and validated the Federal Reserve’s accommodative stance, lifting the technology-heavy Nasdaq one per cent higher and powering the S&P 500 to a record close.

President Joe Biden today released his first budget proposal to Congress, offering a long-awaited glimpse into a policy agenda that will mark a sharp departure from his predecessor, Donald Trump.

In it, he set aside $14bn in spending on initiatives to fight climate change and proposed a 16 per cent increase in federal spending on domestic priorities including education and reducing poverty.

The proposals also included $1.2bn toward investing in security technology, such as sensors to detect illegal crossing on its southern border.

Read more: FTSE 250: The best and worst performers ranked as index hits record high

Meanwhile London’s FTSE 100 slipped by nearly 0.4 per cent on Friday but the blue-chip index was set for its best weekly performance since early January.

Overall optimism about an economic recovery in the UK softened the implications of the fall, which was dragged lower by heavyweight banking stocks.

British American Tobacco took a 2.5 per cent, slipping to the lower end of the index after JP Morgan downgraded the stock to “neutral” from “overweight”.

The losses were limited by a rise in consumer discretionary stocks, with JD Sports adding three per cent after Berenberg raised its price target.

The FTSE 100 index is up more than two per cent this week, its sharpest rise since the first week of January.

It has added more than seven per cent following increased vaccine rollouts and government support to lift the economy from a pandemic-driven recession.

Read more: UK house prices reach new record high as property market booms

“There is, to some extent, a bit of a breather today because the FTSE 100 certainly has climbed to a level it’s not seen since the pandemic hit the UK,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

Meanwhile, the mid-cap FTSE 250 edged up by 0.1 per cent after scaling a record high earlier in the week. The domestically focused index is on track for a third straight weekly gain.

Market movers

The morning’s biggest winner was foodservice firm Compass Group, who rose 2.6 per cent, closely followed by Spirax-Sarco Engineering, up by 2.5 per cent.

AstraZeneca and fashion house Burberry also rose 2.3 per cent and 2.4 per cent respectively.

Johnson Matthey was the morning’s biggest faller, dropping by 4.3 per cent, followed by Royal Dutch Shell’s 2.3 per cent hit.

Meanwhile, Standard Chartered and Barclays both dipped by two per cent and 1.4 per cent respectively.

Read more: Boohoo opens new warehouse to boost sales growth

Around the world

Elsewhere, global stocks hovered near record highs on Friday as receding US inflation fears pushed down bond yields and lifted Wall Street.

In Asia, Japan’s Topix gained 0.4 per cent while Chinese shares slipped 1.5 per cent as inflation data raised concerns over policy tightening.

Meanwhile, European stocks were subdued on Friday but were on course for their longest weekly winning streak in more than a year.

The pan-European Stoxx 600 index inched down 0.01 per cent after hitting an all-time high at the open.

Read more: US blacklists seven Chinese supercomputing groups linked to military