Tech bounceback helps S&P to another record

The S&P 500 closed at a record high on Thursday, as US Treasury yields fell following softer-than-anticipated labour market data, boosting technology and other growth stocks.

Weekly initial jobless claims data showed a second straight rise, conflicting with the recent payrolls report, and buttressed the Federal Reserve’s dovish policy stance to keep interest rates lower for a substantial period.

Federal Reserve Chair Jerome Powell signaled on Wednesday the central bank is nowhere near reducing support for the US economy, saying an expected rise in prices this year is likely to be temporary.

The softer data helped yields on the benchmark 10-year US Treasury note fall as low as 1.624 percent, its lowest level since March 26, as it continues to back away from a 14-month high of 1.776 percent hit in late March.

“Wall Street rewards growth, that doesn’t mean value names will never go up, they will go up because they have more growth prospects than their neighbors, that is what this whole thing is predicated on,” said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh.

“It was kind of ridiculous that bond yields were preceding runaway inflation and that was not the case, so tech lives another day.”

The Dow Jones Industrial Average rose 0.17 percent to 33,504, the S&P 500 gained 0.42 percent, to 4,097 and the Nasdaq Composite added 1.03 percent, to 13,829.

The recent pullback in yields has helped high growth names such as those in technology, the sector that posted the session’s biggest rise. Megacap stocks such as Apple , Microsoft and Amazon were the biggest boosts to the S&P 500.

The gains sent the tech-heavy Nasdaq to a seven-week high and within 2 percent of its February 12 record closing high.

The Russell 1000 growth index, which consists heavily of tech-related stocks, gained 1.05 percent. Its value counterpart, comprising mostly financials and energy names, edged 0.05 percent lower. (Reuters)