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Stocks ended broadly higher on Wall Street on Thursday, adding to the gains that helped the market close its best first half since the dot-com bubble.
The S&P 500 rose 0.5%, marking its sixth consecutive gain and fourth consecutive record. The price of US crude oil rose more than 2%, giving energy companies a boost. Bond yields edged up and helped lift bank stocks. Healthcare and communications companies have also helped drive the market up. The consumer staples sector was the only sector lagging behind, dragged down by a pullback in Walgreens Boots Alliance shares.
Investors have been encouraged by data which shows the economy is continuing to recover from the pandemic. The latest weekly unemployment report showed the lowest number of applications for unemployment assistance since the pandemic devastated the economy. The highly anticipated June jobs report comes out on Friday.
“Investors are eager to see whether or not the job market continues to recover as quickly as expected,†said Charlie Ripley, senior investment strategist at Allianz Investment Management.
The S&P 500 Index gained 22.44 points to 4,319.94. The Dow Jones Industrial Average gained 131.02 points, or 0.4%, to 34,633.53. The tech-rich Nasdaq Composite added 18.42 points, or 0.1%, to 14,522.38.
Small business stocks have performed better than the rest of the market. The Russell 2000 Small Business Index rose 18.81 points, or 0.8%, to 2,329.36.
The benchmark S&P 500 ended the first half of 2021 up 14.5%, its best six-month period since 1998, as investors embraced the post-pandemic economic recovery and put aside concerns about the ‘inflation.
Employment has been one of the weakest areas of the economic recovery and has lagged behind other measures such as consumer confidence and retail sales. Economists and analysts have said that a much fuller and more stable recovery depends on more people getting back to work.
Investors will receive the June jobs report on Friday. Economists polled by FactSet expect the US economy to create 675,000 jobs last month and the unemployment rate to fall to 5.7%.
The June jobs report is also being watched closely as a potential indicator of when the Federal Reserve may begin to ease its bond purchases and other measures that have kept interest rates low. Inflation fears have eased somewhat, but investors are still trying to determine whether the rise in inflation will be temporary or more lasting.
As part of the jobs report, investors will look to see if wages continue to rise, which could worsen inflation.
“All of these things fuel the question of whether the Fed will make any significant policy changes in the near future,” Ripley said.
Airlines and other travel-related businesses that have been hit by the pandemic have gained traction following the latest bullish unemployment data. Delta Air Lines grew 2.2% and Marriott 2%.
The yield on the 10-year Treasury bill rose to 1.46% from 1.44% the day before.
Oil prices surged as OPEC met. The group of oil-producing countries are planning to increase production as the global economy recovers from the pandemic. The prices of oil as well as other raw materials have risen steadily this year as demand has increased. Oil gained 2.4% on Thursday and is up 55% so far this year.
“Crude oil was really the story of the day,†said JJ Kinahan, chief strategist at TD Ameritrade. “Crude oil, because almost everyone is going to use gasoline directly to drive somewhere, it’s going to hit people’s pocket books a lot faster and has a much bigger effect. ”
Rising oil prices have translated into higher shares of energy companies. Occidental Petroleum rose 5.1%, ConocoPhillips 3.3% and Marathon Oil 4%. The S&P 500 energy sector was the biggest winner in the first half with a gain of over 40%.
Donut chain Krispy Kreme climbed 23.5% on its Nasdaq debut. The Charlotte, North Carolina-based company known for its frozen donuts valued its initial public offering of 29.4 million shares at $ 17 apiece, which was well below the 21-24 dollars she was looking for. This is Krispy Kreme’s second stint as a public company.
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