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Stock Market News for Apr 7, 2021

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Wall Street closed lower on Tuesday following profit booking by market participants. All the three major stock indexes ended in red. Notably, major stock indexes reached record-high level on Monday. However, investors' sentiment remain strong owing to several positive developments.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) was down 0.3% to close at 33,430.24. Notably, 12 components of the 30-stock blue-chip index ended in the green while 18 in red. The tech-heavy Nasdaq Composite finished at 13,698.38 falling 0.1% and reversing a three-day winning streak due to weak performance by large-cap stocks. The major loser of the tech-laden index is Paychex Inc. (PAYX - Free Report) that dropped 4.9%. Paychex carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Meanwhile, the S&P 500 declined 0.1% to end at 4,073.94, ending a three-day winning run. In intraday trading, the broad-market index touched a record-high at 4,086.23. The Utilities Select Sector SPDR (XLU) gained 0.5% while the Health Care Select Sector SPDR (XLV) lost 0.4%. Notably, six out of eleven sectors of the benchmark index closed in the green while five in red.

The fear-gauge CBOE Volatility Index (VIX) was up 1.2% to 18.12. A total of 9.65 billion shares were traded on Tuesday, lower than the last 20-session average of 12.39 billion. Advancers outnumbered decliners on the NYSE by a 1.54-to-1 ratio. On Nasdaq, a 1.05-to-1 ratio favored declining issues.

Biden Proposes $2.3 Trillion Infrastructure Plan

On Mar 31, President Joe Biden unveiled his $2.3 trillion infrastructure development plan. Notably, some economists believe that final expenditure may reach around $4 trillion as additional parts are announced. The proposed plan will allocate $621 billion into transportation infrastructure such as bridges, roads, public transit, ports, airports and electric vehicle development. Provide $400 billion to care for elderly and disabled Americans.

Biden's proposal will include more than $300 billion for improving drinking-water infrastructure, expanding broadband access and upgrading electric grids. It will allocate more than $300 billion into building and retrofitting affordable housing, along with constructing and upgrading schools. The new plan has the provision to invest $580 billion in American manufacturing, research and development and job training efforts.

IMF Raises Global Growth Forecast

The International Monetary Fund (IMF) upgraded its global growth forecast for 2021 to 6% from 5.5% in January. In 2022, the global GDP is expected to grow 4.4% compared with 4.2% estimated in January. The agency said that advanced economies will expand in 2021 with an average growth rate of 5.1% while the U.S. economy is likely to grow by 6% as against an estimated 5.1% predicted in January.

According to the latest IMF projections, the unemployment rate in the United States is expected to improve from 8.1% in 2020 to 5.8% in 2021 and to 4.1% in 2022. The United States is expected to exceed pre-pandemic GDP level this year.

Per the IMF’s economic counsellor, Gita Gopinath “a way out of this health and economic crisis is increasingly visible.”

Economic Data

The Department of Labor reported that U.S. job openings increased by 468,000 in February to reach at 7.4 million compared with 7.1 million in January. Notably, February's data was highest in two years.

Stocks That Have Made Headline

Shell Renews Q1 View, Foresees Lower Upstream Output

Royal Dutch Shell (RDS.A - Free Report) recently provided an update on its first-quarter 2021 guidance. The Texas winter storm disrupted the company’s operations and is estimated to bear a negative impact of up to $200 million on its adjusted earnings. (Read More)

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