Wall Street Closes Higher Friday as S&P 500, Dow Hit Record Highs

James Hyerczyk
·2 min read

The major U.S. stock indexes finished higher on Friday, setting new records in the process on the back of strong earnings from blue-chip companies as well as robust economic data that signaled a solid recovery from the pandemic was in the works.

In the cash market, the benchmark S&P 500 Index settled at 4185.47, up 15.05 or +0.36%. The blue chip Dow Jones Industrial Average finished at 34200.67, up 164.68 or +0.48% and the technology-based NASDAQ Composite closed at 14052.34, up 13.58 or +0.10%.

The S&P 500 Index scored three closing highs this week, while the Dow surpassed its best finish two days running. The tech-heavy NASDAQ Composite finished less than one percent below its own all-time closing high achieved on February 12.

Investor Sentiment Boosted by Slew of Economic Data

Housing starts surged 19.4% to a seasonally adjusted annual rate of 1.739 million units last month, the highest level since June 2006. Economists polled by Reuters had forecast starts would rise to a rate of 1.613 million units in March.

Permits for future home building rose 2.7% to a rate of 1.766 million units last month, recouping only a fraction of February’s 8.8% plunge. They jumped 30.2% compared to March 2020.

Inflation concerns were on consumers’ minds early this month. A separate report from the University of Michigan on Friday showed its preliminary consumer sentiment index rose to 86.5 from a final reading of 84.9 in March. Economists had forecast the index would rise to 89.6.

Finally, the survey’s one-year inflation expectation jumped to 3.7%, the highest level in nearly a decade, from 3.1% in March. Its five-year inflation outlook was unchanged at 2.7%.

Strong Bank Earnings Reflect Snapback in Economy

The last of the six largest U.S. banks to report – Morgan Stanley – posted stronger-than-expected earnings, bolstered by strong trading and investment results. The bank reported a 150% jump in quarterly profit on Friday, joining the other U.S. banks in posting first-quarter numbers that reinforced hopes of a swift economic recovery. Still, the investment bank’s shares fell 2.8% as it also disclosed an almost $1 billion loss from the collapse of private fund Archegos.

PNC Financial gained more than 2% after the bank beat estimates on the top and bottom lines for its first-quarter report.

Meanwhile, shares of JPMorgan Chase & Co, Goldman Sachs Group, Bank of America Corp and Wells Fargo & Co rose between 0.7% and 3.8%. This helped the S&P Financials Index climb to a second consecutive record finish.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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