American flags hang outside of the New York Stock Exchange, in this Tuesday, Feb. 16, 2021, file photo. (AP Photo/Frank Franklin II, File)
By Damian J. Troise and Alex Veiga
Several major U.S. stock indexes hit all-time highs Thursday, as a recent stretch of volatile trading in the bond market continued to ease, keeping investors in a buying mood.
The S&P 500 index rose 1%, extending its winning streak to a third day as it scored a record high. The Dow Jones Industrial Average and Russell 2000 index of smaller companies also hit all-time highs. The latest gains came as President Joe Biden signed a huge economic relief bill into law.
Technology stocks, which have been hurt this year by rising bond yields, led the market higher, aided by solid gains in communications services companies and those that rely on consumer spending. Banks, utilities and household goods companies fell.
The yield on the 10-year Treasury note inched up to 1.52% from 1.51% late Wednesday. That yield struck the psychologically important 1.60% mark late last week, but has been easing since then.
The recent return of stability to the bond market has been reassuring investors after a sudden spike in long-term interest rates over the past month prompted traders to dump tech shares, which started to look expensive after months of gigantic gains.
"Now that some of the air has come out of the valuations for the (pricier) parts of the market, the stabilization in interest rates is very much being welcomed by investors,” said Elyse Ausenbaugh, global market strategist at J.P. Morgan Private Bank.
The S&P 500 rose 40.53 points to 3,939.34. The benchmark index is on track for its second straight weekly gain. The Dow added 188.57 points, or 0.6%, to 32,485.59, its second all-time high in a row.
The Nasdaq composite gained 329.84 points, or 2.5%, to 13,398.67. The tech-heavy index, which earlier in the week skidded more than 10% below its February peak, has regained some ground, but remains 4.9% below that all-time high.
Traders also bid up shares in smaller stocks. That pushed the Russell 2000 index up 52.86 points, or 2.3%, to 2,338.54.
Up until this week, bond yields have been steadily climbing higher as investors made big bets that trillions of dollars of coming government stimulus will result in strong economic growth later this year and potentially some amount of inflation.
Much of the uncertainty facing the market at the beginning of the year has faded, he said, as vaccine distribution ramped up and businesses reopened. The latest round of stimulus from Washington is also helping to lift uncertainty about the recovery.
“We’re entering this environment where growth is going to be higher than expected,” said Charlie Ripley, senior investment strategist for Allianz Investment Management. “With higher growth you get higher interest rates.”
Big Tech companies powered the latest tech sector rally. Apple rose 1.7%, Microsoft added 2% and Google’s parent company, Alphabet, gained 3.2%.
The biggest IPO in years rolled out Thursday on the New York Stock Exchange where Coupang, the South Korean equivalent of Amazon in the U.S., or Alibaba in China, began trading under the ticker “CPNG.” The stock soared 40.7%. It’s actually the largest initial public offering from an Asian company since Alibaba went public about seven years ago. And it’s the biggest in the U.S. since Uber raised more than $8 billion in 2019.
General Electric fell 7.4% for the biggest slide in the S&P 500 for the second straight day. The industrial titan announced it would wind down its GE Capital business and merge its jet leasing business with Ireland's AerCap. GE is in the midst of a multi-year turnaround plan, but investors have been concerned GE has been selling off too many of its more profitable assets.
The price of U.S. crude oil rose 2.5% and lifted energy company stocks. Occidental Petroleum jumped 5.5% and Hess rose 3.2%.
A rare magnum of Dom Pérignon Vintage 1961 champagne that was specially produced for the 1981 wedding of Prince Charles and Lady Diana has failed to sell during an auction. Danish auction house Bruun Rasmussen handled the bidding Thursday. The auction's house website lists the bottle as not sold. It was expected to fetch up to around $93,000. It is one of 12 bottles made to celebrate the royal wedding. Little was revealed about the seller. The auction house says the bids did not receive the desired minimum price.
The New York Times and President Donald Trump are fighting again. The news outlet said Wednesday it won't be deterred by Trump's “false and inflammatory language” from writing about the 79-year-old president's health. The Times has done a handful of stories on that topic recently, including an opinion column that said Trump is “starting to give President Joe Biden vibes.” In a Truth Social post, Trump said it might be treasonous for outlets like the Times to do “FAKE” reports about his health and "we should do something about it.” The Republican president already has a pending lawsuit against the newspaper for its past reports on his finances.
OpenAI has appointed Slack CEO Denise Dresser as its first chief of revenue. Dresser will oversee global revenue strategy and help businesses integrate AI into daily operations. OpenAI CEO Sam Altman recently emphasized improving ChatGPT, which now has over 800 million weekly users. Despite its success, OpenAI faces competition from companies like Google and concerns about profitability. The company earns money from premium ChatGPT subscriptions but hasn't ventured into advertising. Altman had recently announced delays in developing new products like AI agents and a personal assistant.
President Donald Trump says he will allow Nvidia to sell its H200 computer chip used in the development of artificial intelligence to “approved customers” in China. Trump said Monday on his social media site that he had informed China’s leader Xi Jinping and “President Xi responded positively!” There had been concerns about allowing advanced computer chips into China as it could help them to compete against the U.S. in building out AI capabilities. But there has also been a desire to develop the AI ecosystem with American companies such as chipmaker Nvidia.
U.S. sports betting is booming as NFL and college football fuel massive activity. BetMGM CEO Adam Greenblatt breaks down trends, growth, and what’s next.
President Donald Trump says a deal struck by Netflix last week to buy Warner Bros. Discovery “could be a problem” because of the size of the combined market share. The Republican president says he will be involved in the decision about whether federal regulators should approve the deal. Trump commented Sunday when he was asked about the deal as he walked the red carpet at the Kennedy Center Honors. The $72 billion deal would bring together two of the biggest players in television and film and potentially reshape the entertainment industry.
Disney's changes to a program for disabled visitors are facing challenges in federal court and through a shareholder proposal. The Disability Access Service program, which allows disabled visitors to skip long lines, was overhauled last year. Disney now mostly limits the program to those with developmental disabilities like autism who have difficulty waiting in lines. The changes have sparked criticism from some disability advocates. A shareholder proposal submitted by disability advocates calls for an independent review of Disney's disability policies. Disney plans to block this proposal, claiming it's misleading. It's the latest struggle by Disney to accommodate disabled visitors while stopping past abuses by some theme park guests.
