Change as we speak: Dow clears 34,000, Nasdaq surpasses 14,000 as restoration accelerates

If you’re a fan of big, round numbers, you’ve likely enjoyed Thursday’s market activity, with major stock indices flirting with a pair of these amid a broad, robust rally.

Fill up with today’s fire? For one, the lowest value for initial jobless claims in the COVID recovery: 576,000 for the week ending April 10, a sharp drop of 193,000 from the previous week.

“The decline in initial entitlements suggests that job separation rates are gradually returning to normal as the economy picks up pace after it has been rising during the recovery,” said Jonathan Millar, US deputy chief economist at Barclays Investment Bank. “Sustained progress on this front would be a very positive development for the labor market recovery, which has lagged far behind the activity recovery.”

Also optimistic was a massive 9.8% month-over-month increase in retail sales in March, which slightly clarified consensus views for a 5.8% improvement.

“There is a lot of catching up to do in business, as Thursday’s retail report showed,” said Vanessa Martinez, managing director and partner at wealth management company The Lerner Group. “Consumer savings rates have increased over the past year and we expect consumer spending to remain high for the remainder of 2021, which should be very good for 2021 GDP numbers.”

The yield reports also contributed to the exuberance. UnitedHealth Group (UNH, + 3.8%) reported a year-on-year profit jump of almost 43% to USD 5.31 per share, which slightly detracted from analyst expectations. This helped spark a strong day in the health sector (+ 1.7%) and the Dow Jones industry average after the mark of 34,000, an increase of 0.9% to a record value of 34,035.

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Semiconductor stocks like Nvidia (NVDA, + 5.6%) and modern micro devices (AMD, + 5.7%) supplied the Nasdaq Composite (+ 1.3% to 14,038) through the level of 14,000. And the S&P 500 rose 1.1% to a record close of 4,170.

Other actions on the stock market today:

  • The Russell 2000 rose 0.4% to close at 2,257.
  • US crude oil futures improved 0.5% to $ 63.46 a barrel.
  • Gold futures 1.8% higher to $ 1,766.80 per ounce.
  • The CBOE Volatility Index (VIX) decreased by 2.9% to 16.50.
  • Bitcoin Prices rebounded 2.4% to $ 63,489. (Bitcoin trades 24 hours a day; the prices given here apply from 4 p.m. on each trading day.)

Dow 34K: Just the beginning?

Thursday felt solemn, but investors shouldn’t be blowing all the confetti through. Several analysts, who weighed the Dow’s rise to 34,000, believe more is to come.

“The push of the Dow of 34,000 is a signal that investors’ appetites for future growth prospects are shifting to more value-oriented names,” said Peter Essele, director of portfolio management at Commonwealth Financial Network. “Demand for industries and cyclical areas should continue as vaccines prevail and profits may turn out to be higher than originally expected.”

Chris Zaccarelli, Chief Investment Officer of the Independent Advisor Alliance, added that “a reopening economy, with better weather and decreasing consumer caution, will drive markets higher this year and double-digit returns will be possible in 2021.”

These are certainly encouraging remarks for holders of any of the Dow’s 30 stocks, not to mention the numerous other stocks that are counting on the rebound to further reverse their fortunes.

They also bode well for many of the cyclical names found among the potential beneficiaries of President Joe Biden’s recently unveiled “American Jobs Plan”. In general, brisk economic expansion would ignite a fire among many of these stocks – and they could really warm up as Biden’s plan gains momentum in the months ahead. Check out these 15 infrastructure games that could get a boost from the American Jobs Plan.

Kyle Woodley was long an NVDA at the time of this writing.

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