US stocks rise to records more proof of economic recovery
NEW YORK (AP) — U.S. stocks are rallying toward records on Thursday after a suite of encouraging data showed how hungry Americans are to spend again, how fewer workers are losing their jobs and how much fatter corporate profits are getting.
The S&P 500 was 1% higher at 4,164 in afternoon trading and on track to surpass its all-time high of 4,141.59 set on Tuesday. The Dow Jones Industrial Average was also on pace for a record, up 276 points, or 0.8%, at 34,007. The Nasdaq composite was 1.1% higher, as of 1:19 p.m. Eastern time.
Expectations are very high on Wall Street that the economy — and thus corporate profits — are in the midst of exploding out of the cavern created by the pandemic, thanks to COVID-19 vaccinations and massive support from the U.S. government and Federal Reserve. Report after report on Thursday only bolstered those expectations.
One report showed that U.S. retail sales jumped 9.8% in March from February, blowing past economists' forecasts for 5.5% growth. Much of the surge was due to $1,400 payments from the U.S. government's latest economic rescue effort hitting households' bank accounts. Economists said it shows how primed people are to spend as the economy reopens and conditions brighten. That's huge for an economy that's made up mostly of consumer spending.
Another report gave an encouraging read on the job market, showing 576,000 people applied for unemployment benefits last week. That's well below the 700,000 that economists had forecast and down from 769,000 the prior week. It's also the lowest the number has been since the pandemic.
Adding to the optimism, more big U.S. companies reported even healthier profits for the first three months of 2021 than analysts had forecast. Expectations are already high for this earnings reporting season, which unofficially got underway on Wednesday and could result in the strongest growth in more than a decade.
