Stock Market Rises
U.S. stocks rose on Thursday as financial shares rallied following a positive reading of economic growth.
The Dow Jones Industrial Average DJIA, +0.29% traded was last up 70 points, or 0.3%, at 20,729, with shares of UnitedHealth Group Inc. UNH, +1.08% Goldman Sachs Group Inc. GS, +1.26% and Wal-Mart Stores Inc. WMT, +1.08% leading gainers.
Big News
The S&P 500 index SPX, +0.28% traded up 7 points, or 0.3%, to 2,367, with nine out of the index’s 11 sectors in the green, led by the financials and industrial sectors.
The Nasdaq Composite Index COMP, +0.22% climbed 17 points, or 0.3%, to 5,914, with the tech-heavy index on track to close at a fresh all-time high and aiming for a fifth straight finish in positive territory.
Following a lackluster start to trading, all three benchmarks have been trading solidly higher.
Earlier, the government said the U.S. economy, as measured by gross domestic product, expanded at a 2.1% annualized pace in the fourth quarter, slightly faster than the previously reported 1.9% rate. Separately, jobless claims fell by 3,000 to 258,000 in the latest week, near their lowest level in decades.
“This is a market that looks like it may be gaining some traction as we go into the end of the month. The upward revision to GDP suggests economic momentum, and that’s providing some lift,” said Alan Gayle, senior investment strategist at RidgeWorth Investments.
The data helped support financial stocks, which are closely correlated to the pace of economic growth and were the biggest gainers in S&P 500 on the day, up 1.3%. Regional banks in particular enjoyed sharp moves higher, highlighted by a 2.5% gain for Zions Bancorp ZION, +2.66% while Regions Financial RF, +2.80% was up 2.6%. The SPDR S&P Regional Banking ETF KRE, +3.06% popped 3.1%.
With the day’s move, the S&P 500 moved into positive territory for March, up 0.2%. The Dow remains down 0.4% for the month, while the Nasdaq is on pace for a 1.5% March return.
Overall, recent gains have been slight, and of the past seven sessions for the S&P 500, not including Thursday, only one has ended with a move greater than 0.2% in either direction. This rangebound trading may be a sign that recent upward momentum on Wall Street may be stalling, even as major indexes continue to trade near records, strategists say.
Muted trading has been the norm since Friday when the Republican-led health-care bill was pulled from the House floor after the White House was unable to overcome resistance from a conservative GOP faction, the House Freedom Caucus. The failure raised questions about Trump administration’s ability to pass its economic agenda, which had been seen as market friendly.
With many investors expecting a correction triggered by a policy failure, that lowers the possibility that one such correction will actually happen, seeing that “corrections tend to occur when you least expect them,” said Brian Belski, chief investment strategist, at BMO Capital Markets, in a note Thursday.
This Guy Made a Video
Yale University Professor of Economics Robert Shiller and Jonathan Golub, chief U.S. market strategist at RBC Capital Markets, look at stock valuations following Tuesday's market selloff. They speak on "Bloomberg Daybreak: Americas."
