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Stock Market News for Apr 1, 2021

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Markets ended mostly higher on Wednesday, with tech stocks driving the rally to end the first quarter on a high. Investors also waited for President Joe Biden’s announcement on his multi-trillion dollar infrastructure spending plan that is likely to levy higher taxes on corporations. The S&P 500 and Nasdaq ended in positive territory, while the Dow finished in the red.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) declined 0.3% or 85.42 points to close at 32,981.55 after trading between small gains and losses almost throughout the day.

The S&P 500 gained 0.4% or 14.34 points to finish at 3,972.89 points after soaring 0.9% to hit an intraday record 3,994.41. Tech stocks were the biggest gainers. The Technology Select Sector SPDR (XLK) jumped 1.6%. Five of the 11 sectors of the benchmark index closed in positive territory.

The tech-heavy Nasdaq jumped 1.5% or 201.48 points to end at 13,246.87 points. The rally was led by tech stocks once again. Shares of Apple, Inc. (AAPL - Free Report) and Microsoft Corporation (MSFT - Free Report) gained 1.9% and 1.7%, respectively, while Facebook, Inc. jumped 2.3%.  Microsoft has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

The fear-gauge CBOE Volatility Index (VIX) was down 1.07% to 19.49. Advancers outnumbered decliners on the NYSE by a 1.36-to-1 ratio. On Nasdaq, a 1.79-to-1 ratio favored advancing issues.

Tech Stocks Help Markets Ahead of Biden’s Speech

Tech stocks bounced back in a big way on Wednesday, pairing losses suffered in the last session. This helped S&P 500 hit an intraday high as investors eagerly waited for Biden’s speech on his multi-trillion dollar infrastructure spending plan.

An outline of the infrastructure spending plan boasting a whopping $2.3 trillion was unveiled by Biden on Wednesday. The proposed plan is expected to focus on a broad range of infrastructural activities like developing roads, airports, safe water supplies and greener technology. The plan could, reportedly, further rise to $4 trillion.

However, the plan comes at a cost in wherein it will raise the corporate tax from 21% to 28% after being slashed massively form 35% to 21% in 2017.

Cyclical sectors such as energy, materials, financials and industrials all ended the day in red, while tech stocks bounced back from lows.

Biden’s infrastructure spending plan comes less than a month after Congress passed a $1.9 trillion coronavirus relief package. This has left some investors worried about the adverse effect of higher corporate tax and a pickup in inflation amid massive fiscal stimulus.

Economic Data

Private sector payrolls increased by 517,000 in March, according to data from Automatic Data Processing, Inc. (ADP - Free Report) . The numbers came almost in line with analysts’ expectations of 525,000.

However, pending home sales declined 10.6% in February, according to a report from the National Association of Realtors. The Chicago purchasing managers index also was at its highest level in two and half years in March.

Monthly Roundup

The Dow gained 6.6% for the month, while the S&P 500 rose 4.3%. Both the indexes recorded their best month since November and fourth positive month in the last five.

The Nasdaq was relatively an underperformer in March as the 10-year Treasury yield has been on the rise lately. The index posted a meager gain of 0.4% in March.

Quarterly Roundup

Both the Dow and the S&P 500 outperformed the Nasdaq for the quarter. The Dow and S&P 500 jumped 7.8% and 5.8%, respectively while the tech-heavy Nasdaq gained 2.8%. However, all the three major indexes finished in positive for the fourth consecutive quarter.

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