Stocks traded higher Friday in another record-setting day on Wall Street, with a batch of stronger-than-expected economic data and corporate earnings results helping fuel a risk rally.
The S&P 500 and Dow each rallied to record levels, with the latter extending gains well beyond the 34,000 level. The Nasdaq ended a choppy session slightly higher, with technology stocks steadying after recent gains.
“The Dow’s push through 34,000 is a signal that investor appetite for future growth prospects is spilling over into more value-oriented names,” Peter Essele, head of portfolio management for Commonwealth Financial Network, said in an email. “The demand for industrials and more cyclically-oriented areas should continue as the vaccines take hold and earnings potentially come in higher than originally expected.”
Treasury yields ticked up Friday morning after retreating on Thursday even amid a batch of estimates-topping economic data. Retail sales rose in March by the most since May 2020, fueled by a combination of stimulus spending and broadening business reopenings, and new weekly unemployment claims fell to a fresh pandemic-era low. First-quarter corporate earnings have largely topped already lofty estimates, with the big banks that reported this week posting rising sales and profits to coincide with the strengthening economic backdrop.
To many strategists, the stronger-than-anticipated quarterly reports this week are likely just the start of a slew of strong results in the coming weeks.
“We are expecting this economic recovery. It’s only just starting to unfold,” Seema Shah, Principal Global Investors chief strategist, told Yahoo Finance. “We think that as our earnings numbers go through, showing that really positive picture, confirming that positive picture, then that’s going to give the market an additional ‘oomph.’ But certainly, the rotation that we’ve already seen over the last couple of weeks, couple of months, has still got further to go. And really equity markets are in a very good position given this very strong economic backdrop.”