S&P 500 heads for sixth-straight document shut as Wall Road kicks off the second half of 2021

The S&P 500 rose on Thursday and hit one other document excessive as Wall Road kicked off the second half of 2021 on a optimistic notice.

The benchmark index rose 0.4% and was on observe for its sixth-straight document shut. The Dow Jones Industrial Common was greater by about 80 factors, whereas the tech-heavy Nasdaq Composite was flat.

Buying and selling was comparatively quiet although shares of reopening performs cruise strains and airways rose. Power shares confirmed energy as West Texas Intermediate crude rose above $75 per barrel. Shares of Chevron rose 1.4%, making the inventory probably the greatest performers within the Dow.

Attire firm Nike was one other winner, rising practically 2%. Nonetheless, shares of Walgreen Boots Alliance fell greater than 5% regardless of releasing a better-than-expected earnings report, weighing on the 30-stock common.

A stretch of robust financial information continued on Thursday as weekly preliminary jobless claims got here in at 364,000, setting a pandemic-era low. Economists polled by Dow Jones predict preliminary claims for unemployment totaled 390,000 final week, after totaling 415,000 for the week ended June 19.

Moreover, the Institute for Provide Administration’s June manufacturing index confirmed an growth that was roughly in keeping with expectations, and the Congressional Finances Workplace hiked its estimates for financial development.

Thursday’s strikes got here after the key averages closed out a powerful first half of 2021 and second quarter on Wednesday.

For the 12 months, the Dow is up 12.7%, hovering about 1.7% beneath its all-time excessive. The S&P 500 rallied 14.4% within the first half of 2021 and the technology-heavy Nasdaq Composite rose 12.5%. The S&P 500 notched its fifth optimistic month in a row, rising 2.2% in June.

“Higher information on Covid, vaccinations, re-openings, financial development, and earnings fueled the advance.  Practically equal features had been achieved in each quarters by a rotation in management permitting broad participation,” stated Jim Paulsen, Leuthold Group chief funding strategist.

The small cap Russell 2000 rose greater than 17% within the first six months of the 12 months amid a powerful rotation into worth shares because the economic system reopens from the Covid-19 pandemic. Nonetheless, smaller firms and worth shares appeared to lose momentum in current weeks whereas Large Tech shares regained their footing.

Brent Schutte, chief funding strategist at Northwestern Mutual, stated that he anticipated that reversal to show non permanent because the financial restoration continues.

“I believe the inflation fears have form of weighed in and had traders considering that we could also be additional alongside within the cycle than I believe we really are. … I nonetheless assume you have got sufficient financial momentum that development goes to remain robust, maybe at a plateau, for the following 12 months, which for me means you continue to need to be invested in issues the place earnings development is extra cyclical in nature,” Schutte stated.

Equally, Paulsen stated that the trail of inflation and financial development ought to decide market management within the second half.

“If inflation fears do calm additional and bond yields stay decrease for longer, anticipate development and expertise shares to proceed main the inventory market greater. Nonetheless, ought to robust financial development worsen inflationary worries and once more power bond yields greater, correction fears could intensify, and management needs to be centered amongst cyclical inventory sectors, smaller cap shares and even worldwide shares,” Paulsen stated.

Robust first halves for the inventory market traditionally bode effectively for the rest of the 12 months. Each time there was a double-digit achieve within the first half, the Dow and S&P 500 have by no means ended that 12 months with an annual decline, in keeping with Refinitiv information going again to 1950.

When the S&P 500 is up greater than 12.5% to start out the 12 months, the second half has a median achieve of 9.7%, in keeping with LPL Monetary information going again to the Nineteen Fifties.

Probably the most anticipated piece of financial information this week is Friday’s month-to-month jobs report. Economists anticipate 683,000 jobs had been added in June, in keeping with a Dow Jones survey.

On Wednesday, the Dow Jones Industrial Common rose 210 factors, helped by a 2.7% pop in Walmart. The S&P 500 registered a achieve of 0.13% to shut at a contemporary document of 4,297.50. The Nasdaq Composite was the relative underperformer, dipping 0.2% as Fb, Amazon, Netflix and Google-parent Alphabet closed decrease.

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