Dow Extends Winning Streak, Reaching New Record Closing High

Extending its winning streak to six consecutive sessions, the Dow showed a strong move to the upside during trading on Friday, The blue chip index jumped 293.05 points or 0.9 percent to a new record closing high of 32,778.64.

The S&P 500 also inched up 4.00 points or 0.1 percent to a new record closing high of 3,943.34, while the tech-heavy Nasdaq climbed well off its worst levels of the day but still closed down 78.81 points or 0.6 percent at 13,319.86.

Despite the mixed performance on the day, the major averages all moved sharply higher for the week. The Dow soared by 4.1 percent, the Nasdaq surged up by 3.1 percent and the S&P 500 jumped by 2.6 percent.

The continued advance by the Dow came as traders expressed optimism about the economy reopening after President Joe Biden directed states to make all adults eligible for a coronavirus vaccine by May 1st.

The vaccine news combined with the new $1.9 trillion stimulus package led to hopes for a return to normalcy after a year of the coronavirus pandemic.

Adding to the positive sentiment, the University of Michigan released a report showing U.S. consumer sentiment improved by much more than expected in the month of March.

The University of Michigan said its consumer sentiment index jumped to 83.0 in March after dipping to 76.8 in February. Economists had expected the index to inch up to 78.5.

With the much bigger than expected increase, the consumer sentiment index reached its highest level since hitting 89.1 in March of 2020.

Meanwhile, the economic optimism also led to a spike in treasury yields, with the ten-year yield surging above 1.6 percent to reach its highest levels in a year.

The jump in yields weighed on technology stocks, resulting in the pullback by the tech-heavy Nasdaq, which had skyrocketed by 2.5 percent on Thursday.

Sector News

Airline stocks moved sharply higher over the course of the session, with the NYSE Arca Airline Index soaring by 2.2 percent to its best closing level since last February.

The jump in bond yields also contributed to considerable strength among banking stocks, driving the KBW Bank Index up by 1.7 percent to a record closing high.

Commercial real estate, utilities and telecom stocks also moved notably higher, while weakness among semiconductor and software stocks weighed on the tech-heavy Nasdaq.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan’s Nikkei 225 Index surged up by 1.7 percent, while China’s Shanghai Composite Index rose by 0.5 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index fell by 0.5 percent, while the French CAC 40 Index edged up by 0.2 percent and the U.K.’s FTSE 100 Index rose by 0.4 percent.

In the bond market, treasuries showed a significant move to the downside over the course of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 10.8 basis points to 1.635 percent.

Looking Ahead

The Federal Reserve’s monetary policy decision is likely to be in the spotlight next week, with traders looking for the central bank to address the recent spike in bond yields.

Traders are also likely to keep an eye on reports on retail sales, industrial production, housing starts, and regional manufacturing activity.

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