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Consumer spending soared last month on the backdrop of strong retail sales. On the other hand, stocks rallied as the 10-year Treasury dropped 8 basis points.
On Thursday, April 15, the US stock market rallied to record levels with the Dow Jones Industrial Average (INDEXDJX: .DJI) gaining 0.9%. Dow Jones registered its record high gaining 305 points and shooting past 34,000 levels. The S&P 500 (INDEXSP: .INX) gained 1.1% to 4,170.42 while Nasdaq Composite (INDEXNASDAQ: .IXIC) gained 1.31% to 14,038 levels.
The market rally came among fresh economic data showing a spike in consumer spending and improvement in the jobs market. Consumer spending soared as retail sales surged 9.8% last month in March 2021 as per the Commerce Department report.
Also, the first-time filings for unemployment insurance were the lowest over the last year since March 2020. For the week ending April 10, the jobless claims reported by the Labor Department stood at 576,000. This was nearly 30% than what economists polled by Dow Jones had reported.
Over and above, key tech companies reported strong earnings driving optimism on Wall Street. Tech stocks in the popular FAANG category surged 1% each. A strong rally also followed in other growth stocks as the 10-year Treasury Yield dropped 8 basis points below 1.56%. Speaking to CNBC, Ryan Detrick, chief market strategist at LPL Financial said:
“Although 34,000 by itself is just another number, this is a monumental feat when you think back to where we were last year at this time. The speed and resiliency of this economic recovery is unlike anything we’ve ever seen and it helps to justify stocks at all-time highs.”
Strong Banking Results Beat Market Estimates and Push Dow Jones Higher
The economic reopening and trillions of dollars in stimulus have helped the market to rally relatively faster. On Thursday, April 15, Citigroup posted results beating analysts’ estimates for the first-quarter profit. Besides, the bank also reported strong investment banking revenue along with a bigger-than-expected release of loan-loss reserves.
The bank reported revenue of $19.3 billion and a net profit of $7.94 billion. However, Citigroup (NYSE: C) stock erased its early gains and ended 0.5% lower on the chart. The Bank of America Corp (NYSE: BAC) shares also reported strong earnings for the last quarter. The bank’s trading and investment banking results along with the release of the loan-loss reserves.
During an interview on CNBC Squawk Box, BlackRock CEO Larry Finch sounded bullish about the market. He said:
“I believe because of monetary stimulus, fiscal stimulus, cash on the sidelines, earnings, markets are okay. Markets are going to continue to be stronger.”
After a stellar debut on Wednesday, April 15, Coinbase Global Inc (NASDAQ: COIN) shares moved south 1.68% on Thursday. However, just in the first two days, Cathie Wood’s Ark Investments has scooped more than $350 million worth of COIN shares.