The Dow Jones Industrial Average and S&P 500 rose to record closes for a third straight day on Thursday, as hot inflation reading did little to shake investor confidence in the stock market or the economy.
After economically sensitive stocks lifted the 30-stock average on Wednesday, the Dow inched up 14.88 points, or 0.04%, to 35,499.85 on Thursday. The S&P 500 crept up 13.13 points, or 0.30%, to 4,460.83 while the Nasdaq Composite snapped a two-day losing streak with a 51.13 point gain, or 0.35%, to 14,816.26.
Mega-cap tech stocks driving the Dow & S&P
Big tech has been down for a week or so, underperforming the market pretty significantly. However, the sector has made a comeback this week.
Apple, Microsoft, Amazon, Google parent Alphabet Inc, and Facebook, which account for a quarter of the S&P 500’s market capitalization, led shares on the S&P 500 and tech-heavy Nasdaq.
On a day in which more stocks declined than they advanced, shares of Tesla, Nvidia Corp, and Moderna gained.
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Apple added the most to the S&P 500, rising 2.1%, followed by Microsoft with a 1.0% gain and Tesla adding 2.0%.
Healthcare and technology were the best-performing sectors of the S&P 500 while energy weighed the most on the market with growth stocks rising 0.5%.
Producer prices continue to surge
Last month, wholesale inflation saw its biggest annual jump in more than a decade. A report suggests inflation could remain high as demand outstrips supply due to hobbled factory operations.
Solid demand for services was also a big factor behind the price spike, which was in contrast to a slower rate of inflation in Wednesday’s consumer price data.
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Jobless claims
New applications for jobless benefits fell again last week as the economic recovery from the COVID-19 pandemic continued. However, the numbers still remain way above the historical norm.
Art Hogan, Chief Market Strategist at National Securities, says Thursday’s market reaction is a sign investors are comfortable with the idea that the Federal Reserve will soon be scaling down its bond-buying program, also known as tapering.
