Stocks advanced on Friday, with blue-chips and the broader market vaulting to new record highs, as Wall Street continued to price in expectations of a booming economy as the first quarter earnings season kicks off.
Both the Dow Jones Industrial Average (^DJI) and the S&P 500 (^GSPC) rallied in quiet trading to close at their highest ever levels, with both indexes finishing a third consecutive weekly win streak. Meanwhile, the Nasdaq recovered earlier losses to end marginally higher, within view of its record close in February.
Traders considered more reassurances from Federal Reserve Jerome Powell, who reiterated in remarks Wednesday that the Fed was looking for "actual progress" rather than "forecasts" for progress toward the central bank's employment and inflation goals.
Also, next week will kick off the Q1 earnings reporting season, with Corporate America expected to reap the rewards of an economic recovery that's seen gaining momentum. According to FactSet, S&P 500 companies are likely to report their highest earnings growth in more than 10 years.
The Fed chair also underscored the distance still left for the economy to go before reaching these targets and prompting a policy shift, with the recovery in the labor market especially still "uneven and incomplete" to date. A disappointing jobless claims report earlier on Thursday, with new claims unexpectedly climbing for a second straight week, appeared to affirm these sentiments.
Treasury yields have come back down as fears over a near-term Fed policy shift deflated, prompting investors to circle back to growth stocks and large-cap tech names in particular that would benefit from a lower-rate environment. Microsoft (MSFT), Alphabet (GOOGL) and Facebook (FB) each notched record intraday and closing highs during Thursday's session.
These moves back into tech stocks, however, have come at the expense of some of the cyclical and value names that had been outperforming earlier this year. The S&P energy and financials sectors have lagged over the past month, though they remain the two top outperforming sectors when looking back over 2021 to date.
“We’ve seen this rotation into more value-oriented names from growth to value, but as we enter into earnings season, we anticipate growth names to see somewhat of a rebound because we expect strong earnings coming out of the growth names," Colleen MacPherson, Penobscot Investment Management portfolio manager, told Yahoo Finance. "But overall, I think the trend into value, small caps, more cyclical names will continue as the economy reopens and more people are inoculated and we get back to normalcy.”
4:00 p.m. ET: Stocks close at fresh records
S&P 500 (^GSPC): 4,128.78, +31.61 (+0.77%)
Dow (^DJI): 33,800.60, +297.03(+0.89%)
Nasdaq (^IXIC): 13,900.19, +70.88 (+0.51%)
Crude (CL=F): $59.35 per barrel, -0.25 (-0.42%)
Gold (GC=F): $1,744.30, -13.90 (-0.79%)
10-year Treasury (^TNX): +3.4 bps to yield 1.666%
3:30 p.m. ET: China's ride-hailing giant said to prepare for US listing
Didi Chuxing, China's answer to Uber, is tapping Goldman Sachs and Morgan Stanley to lead a blockbuster public offering, and could file confidentially for the New York float this month, two people with knowledge of the matter told Reuters on Friday. The company is aiming for a valuation that's anywhere between $70 billion and $100 billion, according to multiple reports.
2:50 a.m. ET: Stocks hold higher, S&P 500 points toward a third straight weekly gain
The three major indexes traded in the green Friday afternoon, with the Dow outperforming with a gain of 150 points, or 0.5%. The consumer discretionary, health care and industrials sectors led advances in the S&P 500, while energy, consumer staples and communication services lagged.
The Nasdaq reversed earlier losses to turn slightly positive, though it lagged the other two major indexes as technology stocks gave back some of Thursday's gains.
9:40 a.m. ET: Boeing shares fall after company grounds 737 Max jets over electrical issue
Dow-component Boeing (BA) said Friday it has grounded dozens of 737 Max aircraft across more than a dozen customers in order to resolve a new electrical issue with the planes. The announcement came just months after the U.S. Federal Aviation Administration (FAA) cleared the planes to fly after a more than year-long grounding following two deadly crashes.
"Boeing has recommended to 16 customers that they address a potential electrical issue in a specific group of 737 MAX airplanes prior to further operations," Boeing said in a statement Friday. "The recommendation is being made to allow for verification that a sufficient ground path exists for a component of the electrical power system."
The company added it is "working closely with the U.S. Federal Aviation Administration" on the production issue.
9:30 a.m. Stocks open flat as S&P 500 heads for weekly gain
Here's where markets were trading shortly after the opening bell Friday morning:
S&P 500 (^GSPC): -0.37 points (-0.01%) to 4,096.80
Dow (^DJI): +76.21 points (+0.23%) to 33,579.78
Nasdaq (^IXIC): -41.77 points (-0.3%) to 13,787.54
Crude (CL=F): -$0.23 (-0.39%) to $59.37 a barrel
Gold (GC=F): -$23.60 (-1.34%) to $1,734.60 per ounce
10-year Treasury (^TNX): +3.4 bps to yield 1.666%
9:26 a.m. ET: U.S. producer prices jumped more than expected last month
Producer prices in the U.S. increased by 1% in March over February, coming in greater than the 0.5% increase consensus economists expected and the 0.5% monthly rise from the prior month, the Bureau of Labor Statistics said Friday.
Over last year, the producer price index jumped 4.2% for the biggest jump since September 2011, also accelerated over February and coming in greater than the 3.8% rise anticipated.
Excluding more volatile food and energy prices, producer prices rose 0.7% month-over-month, or faster than the 0.2% rise expected. Producer prices excluding food and energy rose 3.1% year-over-year versus the 2.7% rise anticipated.
8:50 a.m. ET: China's factory prices hit the highest level in more than two years as commodity prices increase
China's producer price index jumped far more than expected in March to reach the highest level in over two years, as the costs of goods at the factory gate surged.
The PPI for the world's second largest economy increased by 4.4% in March, accelerating from February's 1.7% monthly gain, according to the country's National Bureau of Statistics. This was also greater than the 3.6% rise expected.
The increase came as a result of "factors such as rising international commodity prices" for inputs like crude and iron ore and as industrial production and investment demand in the country rebounded, according to National Bureau of Statistics senior statistician Dong Lijuan.
7:17 a.m. ET Friday: Stock futures mixed, S&P 500 and Dow futures gain
Here were the main moves in markets as of 7:17 a.m. ET:
S&P 500 futures (ES=F): 4,094.75, up 5.75 points or 0.14%
Dow futures (YM=F): 33,464.00, up 74 points or 0.22%
Nasdaq futures (NQ=F): 13,738.50, down 9.25 points or 0.07%
Crude (CL=F): unchanged at $59.60 a barrel
Gold (GC=F): -$12.30 (-0.7%) to $1,745.90 per ounce
10-year Treasury (^TNX): +3.2 bps to yield 1.664%
6:00 p.m. ET Thursday: Stock futures rise after tech-led session
Here's where markets were trading Thursday evening:
S&P 500 futures (ES=F): 4,096.75, up 7.75 points or 0.19%
Dow futures (YM=F): 33,446.00, up 56 points or 0.17%
Nasdaq futures (NQ=F): 13,785.50, up 37.75 points or 0.27%
Editor's note: An earlier version of this story incorrectly stated the Nasdaq's closing levels. The index closed above 13,900, near its February record high, but not above it.
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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