US Stocks Rise to Record as Economy Grows 6.4% in the First Quarter
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- S&P500 notches a fresh record as strong earnings roll out
- Joe Biden marks 100 days in office as the US GDP grows 6.4%
US equities climbed on Thursday prompted by renewed stimulus prospects and record-beating earnings reports by highflying tech companies. Stock indexes across the board rose as investors cheered positive economic data and a brighter outlook towards recovery, underpinned by new federal stimulus.
The S&P500 stocks pushed to a record, rising 29.28 points, or 0.68%, to eclipse its Monday record and finish the session at an all-time high of 4,211.47. The Dow Jones Industrial Average also ticked higher, climbing 239.98 points, or 0.71%, to 34.060.36. The Nasdaq Composite advanced moderately by 31.52 points, or 0.22%, to close at 14,082.55.
On Thursday, investors’ hopes for a swift economic recovery were lifted even higher by the latest US GDP report. Fresh figures indicated the US economy grew at a rate of 6.4% in the first quarter of 2021 and is on track to reach its pre-pandemic levels. In addition, the weekly jobless claims fell by 13,000 to 553,000. This brings the four-week moving average to a new pandemic low of 611,750.
The US economy is growing at its fastest pace towards recovery since the 1980s. The pick-up in economic activity and the acceleration of hiring is primarily a result of the receding pandemic in the US and the reopening of the economy, which is receiving strong support from the US Treasury and the US Federal Reserve.
A Positive Outlook on the Horizon
The positive environment and swift economic growth are evident in the latest earnings reports, which have shattered profit and revenue estimates and brought the valuations of big tech companies to new highs. Apple reported one of the best-ever quarterly results in US corporate history in terms of profits. The iPhone maker’s profit for the period from January through March reached $23.6bn.
Facebook also beat analyst expectations this week as it reported a boom in its ads business. Shares of social media reached an all-time high this week, trading near the $330 mark. Amazon, Tesla, Google, Microsoft were among the other tech giants that managed to scale this quarter and comfortably beat Wall Street forecasts for profit and revenue.
On Thursday, President Biden celebrated his first 100 days in office, coinciding with a record of the broad-based S&P500 index. During the time of Mr. Biden’s presidency, the S&P500 has risen 11%, marking its strongest performance since the first term of President Franklin D. Roosevelt in 1933 when the index soared 80% after the Great Depression. During the first 100 days of President Trump in office, by comparison, the S&P500 rose 5.3% in early 2017.
The increasing valuation of the stock market, which has seen tens of new highs for the past three months, has been fueled by trillions of government spending, and more are expected to arrive. Also boosting the pace of recovery is the rising number of vaccinated people across the states. Combined with the economic reopening, investors’ growing faith in a brighter future has brought all three benchmark indexes to never-before-seen levels this year.
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