Nasdaq and S&P 500 end at record highs; Dow rallies

(Reuters) – The Nasdaq and the S&P 500 indexes closed at record highs on Thursday, with the Dow also jumping after U.S. President Joe Biden embraced a bipartisan Senate infrastructure deal.

FILE PHOTO: People are seen on Wall Street outside the New York Stock Exchange (NYSE) in New York City, U.S., March 19, 2021. REUTERS/Brendan McDermid

With massive fiscal stimulus helped the U.S. economy grow at a 6.4% annualized rate in the first quarter, investors have been banking on an infrastructure agreement that could steer the next leg of the recovery for the world’s largest economy and fuel more stock gains.

Construction and mining equipment maker Caterpillar and aerospace firm Boeing jumped, helping lift the Dow Jones Industrial Average.

“In the short term, I think there will be some ‘buy the rumor and sell the news’ in materials and industrials, but as we start to see more details come out about how the money will be spent, I think we will get a continued benefit,” said Sal Bruno, chief investment officer at IndexIQ in New York.

Fueling the S&P 500’s gains more than any other stock, Tesla Inc rose after Chief Executive Officer Elon Musk said he would list SpaceX’s space internet venture, Starlink, when its cash flow is reasonably predictable, adding that Tesla shareholders could get preference in investing.

Mega-caps PayPal and Facebook Inc gained, and were also among the biggest boosts to the S&P 500 and the Nasdaq.

Initial claims for state unemployment benefits fell 7,000 to 411,000 for the week ended June 19, the Labor Department said on Thursday, but were still higher than the 380,000 that economists had forecast.

The Commerce Department said the economy grew at a 6.4% rate last quarter, unrevised from the estimate published in May.

So far this month, the S&P 500 growth index has climbed almost 4%, outperforming the value index’s 2% drop.

(Graphic: S&P 500 Forward PE, )

Unofficially, the Dow Jones Industrial Average rose 0.95% to end at 34,196.49 points, while the S&P 500 gained 0.58% to 4,266.37. The Nasdaq Composite climbed 0.67% to 14,367.50.

The S&P 500 technology, healthcare and communication services sector indexes hit record highs.

Eli Lilly and Co hit a record high after the drugmaker said it would apply for the U.S. Food and Drug Administration’s accelerated approval for its experimental Alzheimer’s drug this year.

In response, Biogen Inc, which received a controversial approval for its Alzheimer’s drug aducanumab earlier this month, tumbled.

MGM Resorts International rose after Deutsche Bank upgraded the casino operator’s stock to “buy” from “hold.”

Accenture Plc gained after the IT consulting firm raised its full-year revenue forecast.

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