The S&P 500 reached an intra-day record high on Wednesday but stopped short of 4,000 points, as investors focused on a swift vaccine rollout and expectations of a massive U.S. infrastructure package that would fuel economic growth. Conway G. Gittens wraps up the trading day.
The S&P 500 touched a fresh record high near the 4,000 mark on Wednesday, as investors anticipate more stimulus by way of President Biden’s infrastructure plan.
The Dow stumbled, falling 85 points, but the S&P 500 gained 14. The Nasdaq surged 201.
Stocks have posted gains for four straight quarters.
Details of the Biden plan and anticipation of the full reopening of the U.S. economy powered Wednesday’s gain, says Riverfront Investment’s Co-Chief Investment Officer for Global Fixed Income Kevin Nicholson.
“As we get more vaccinations, we’re getting closer and closer to reopening the economy, and that’s why the markets are moving higher, because you have to think about that. We’ve had about 70 percent of our economy — you know, we’re a service-oriented economy and 70 percent of our GDP comes from consumption and the service industry has been shut down; and so now that they are getting closer to reopening, I think that markets are reacting to that.”
Progress toward the reopening showed up in the latest hiring data. Private employers did the most hiring in six months in March, according to payroll processing company ADP. Much of the hiring came from the leisure and hospitality industry.
In not-so-good news, pending home sales snapped an eight-month string of gains. Lack of inventory and higher mortgage rates were a drag.
Sticking with the reopening theme: Delta, the final hold-out in keeping the middle seat clear as a precaution during the health crisis, is ending the practice starting May 1st. The move will allow it to sell more tickets on each flight as more Americans prepare to travel once vaccinated.
And Microsoft was another big corporate story of the day. It won a close to $22 billion contract to supply the U.S. Army with augmented reality equipment.