US stock markets hit record highs as economy appears to rebound strongly
Sharp rise in consumer spending, falling unemployment claims and strong earnings from largest companies boost markets
US stock markets hit record highs again on Thursday boosted by a sharp rise in consumer spending, falling unemployment claims and strong earnings from some of the largest US companies.
The Dow Jones Industrial Average gained 256 points in morning trading, passing 34,000 for the first time after a slew of good news about the economy. The S&P also hit an intraday high.
The US economy appears to be rebounding strongly from the Covid-19 pandemic as vaccination rates surge and businesses reopen.
The commerce department said retail spending increased by nearly 10% in March as federal stimulus funds made their way to households and pandemic-related restrictions were lifted. The gains were broad-based, with restaurants and bars and retail, two sectors hit hard by the pandemic, gaining ground.
The retail news came as the number of people filing for unemployment benefits hit a pandemic low. According to the latest figures from the labor department 576,000 people filed unemployment claims last week, down from 769,000 a week earlier. While the number is still twice as high as it was before the coronavirus arrived in the US, it marks a low point in claims for the pandemic.
Markets were further cheered by better than expected results from some of the country’s largest companies. Citigroup released better than expected quarterly results on Thursday morning and BlackRock, the world’s largest asset manager, logged a 16% jump in profit.
“I am incredibly bullish on the markets,” Larry Fink, BlackRock chief executive, said in an interview on CNBC’s Squawk Box. “I believe because of monetary stimulus, fiscal stimulus, cash on the sidelines, earnings, markets are OK. Markets are going to continue to be stronger.”
In the UK, the FTSE 100 index ended the day at its highest level in over a year, just below 7,000. The FTSE 250 index of medium-sized companies hit a record peak, boosted by shares in housebuilders, transport firms and retailers.