U.S. stocks inched higher on Thursday led by the technology sector, as the market looked to continue February’s momentum.
The Dow Jones Industrial Average climbed 50 points, and the S&P 500 gained 0.4%. Tech was the best-performing sector, rising more than 1%. The Nasdaq Composite traded 0.6% higher as Microsoft, Apple and Facebook climbed.
After a strong runup in equities in the beginning of February, the market rally seemed to slow down a tad. The Dow advanced slightly Wednesday to eke out a record high, bringing its monthly gains to nearly 5%. The S&P 500 and the Nasdaq closed lower in the previous session.
“We pulled a lot of optimism forward, and the market is trying to figure out where we go from here,” said Gregory Faranello, head of U.S. rates trading at AmeriVet Securities. “The fiscal and monetary side of the equation seems priced into the market. Going forward, we need to see a broader economic recovery, a broader reopening and a broader dissemination of the vaccine.”
On the data front, new claims for jobless benefits came in at 793,000 last week, worse than an estimate of 760,000 from economists polled by Dow Jones.
Federal Reserve Chairman Jerome Powell said Wednesday that the economy faces challenges in the labor market, and so monetary policy needs to stay “patiently accommodative.” In remarks at the Economic Club of New York, Powell said the employment picture is a “long way” from where it needs to be.
“Powell stuck to his guns today,” said LPL Financial Chief Market Strategist Ryan Detrick. “With many worried about too much stimulus and higher inflation, he is more worried about a stubborn employment picture. The truth is low rates are here to stay for the foreseeable future and today’s speech did little to change that.”
In Washington stimulus talks are ongoing, with investors anticipating that any additional relief measures would support equities further.
“The markets are anticipating a large amount of stimulus being pumped into the economy,” noted Scott Wren, senior global market strategist for Wells Fargo Investment Institute. “We do believe additional stimulus is needed to help the economy and consumers bridge the gap between now and when vaccines are more widely administered and lockdowns are lifted.”
Investors also took comfort in a solid earnings season. Of the S&P 500 components that have reported earnings thus far, more than 80% have topped Wall Street’s expectations, according to a CNBC analysis.
Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.
