News: U.S. stocks close mixed as Dow notches fifth straight record high.
NEW YORK (Reuters) – The blue-chip Dow hit its fifth record high in a row on Friday, and the S&P 500 closed slightly higher as investors bought stocks that should benefit from a strong reopening of the US bond market .
The tech-heavy Nasdaq fell after rebounding more than 6% in the past three sessions as rising bond yields revived inflation worries and clouded the appeal of high-growth technology stocks.
The S&P 500 and Nasdaq saw their largest weekly percentage gains since early February after President Joe Biden signed one of the largest US stimulus packages on Thursday and increased belief that the economy was headed for a high-growth recovery.
The recent surge in US Treasury bond yields has raised fears of a sudden weakening of monetary stimulus and has put pressure on Wall Street in recent weeks.
The return on the 10-year benchmark note was 1.642% on Friday, its highest level since February last year. [US/]
Boeing Co rose 6.82%, topping the Dow and S&P 500. The rising Dow and falling Nasdaq reflect ongoing tech sell-offs as investors buy cyclical and undervalued value stocks that are expected to do well when the economy rebounds.
In order to Tech- Shares can continue to thrive and require low interest rates and slower growth, said Thomas Hayes, chairman and executive director of Great Hill Capital LLC hedge fund.
But with the stimulus package, the economy is likely to grow 7% to 9% this year and put pressure on interest rates, he said.
“That’s why interest rates are rising today because the reopening is happening faster and stronger than expected. And then value, cyclicals and economically sensitive stocks outperform, ”said Hayes.
The rapid distribution of vaccines and increased tax subsidies have raised concerns about rising inflation, despite assurances from the Federal Reserve that it will maintain accommodative policies. All eyes will be on the central bank policy meeting next week for more clues about inflation.
US consumer sentiment improved to its strongest level in a year in early March, according to a University of Michigan poll on Friday.
The Dow Jones Industrial Average rose 293.05 points, or 0.9%, to close at 32,778.64. The S&P 500 gained 4 points or 0.10% to 3,943.34. The Nasdaq Composite fell 78.81 points, or 0.59%, to finish at 13,319.87.
During the week, the S&P was up 2.6%, the Dow up 4.1% and the Nasdaq up 3.1%. It was the Dow’s biggest weekly gain since November.
The volume on US exchanges was 11.64 billion shares.
The Nasdaq has been particularly hard hit by the sell-off in recent weeks and confirmed a correction earlier in the week as investors swapped highly valued technology stocks for stocks in energy, mining and industrial companies poised to benefit more from an economic rebound.
Value stocks gained about 0.80% while growth stocks plunged 0.62% in continuation of a rotation that began late last year.
The soaring but yield sensitive group of stocks including Facebook Inc, Apple Inc, Amazon.com Inc, Netflix Inc, Google parent Alphabet Inc, Tesla Inc and Microsoft Corp, which fueled last year’s rally, all fell.
Tech communications services and consumer discretionary indices, which include these mega-cap stocks, were the worst performers among the major S&P sectors.
The banking index rose 1.83% while financials and industrials hit new record highs.
Ulta Beauty Inc was down 8.4% after the cosmetics retailer forecast annual sales below estimates as demand for makeup products came under pressure from expanded work-from-home guidelines.
US-listed shares of JD.com Inc, based in China, fell 6.7% after three sources said the company was in talks to buy some or all of its stake in brokerage Sinolink Securities worth at least 1.5 Billion USD to buy.
Advancing issues outperformed declining issues on the NYSE by a ratio of 1.24 to 1; On Nasdaq, a ratio of 1.14 to 1 favored the advanced.
The S&P 500 posted 83 new 52-week highs and no new lows. The Nasdaq Composite made 396 new highs and 12 new lows.
Reporting by Herbert Lash in New York; Additional coverage from Medha Singh, Shashank Nayar and Sagarika Jaisinghani in Bengaluru; Adaptation by Maju Samuel and Matthew Lewis
Original Source © Reuters