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Stock Market News for Apr 16, 2021

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Benchmark hit new records on Thursday as rebound in consumer spending and a buoyant jobs market attested economic recovery along with better-than-expected Q1 earnings reports.

The Dow Jones Industrial Average (DJI) jumped 305.10 points, or 0.9%, to close at 34,035.99 and the S&P 500 rose 45.76 points, or 1.1%, to close at 4,170.42. The Nasdaq Composite Index closed at 14,038.76, adding 180.92 points, or 1.3%. The fear-gauge CBOE Volatility Index (VIX) decreased 2.5%, to close at 16.57. Advancing issues outnumbered declining ones for 1.93-to-1 ratio on the NYSE.

How Did the Benchmarks Perform?

The Dow hit a new closing record crossed the 34,000 milestone after jumping 300 points fueled by strong economic date and better than expected earnings report that indicated economic rebound. While the Nasdaq and the S&P 500 hit records thanks to the rally in tech stock fueled by falling bond yields. The tech-laden Nasdaq crossed the 14,000 mark for the first time since February, yesterday and the broader index booked another record high.

Nine of the 11 major sectors of the S&P 500 closed in the positive territory with the real estate, technology and health sectors closing at least 1.7% higher for the session. The Dow’s exemplary performance was led by UnitedHealth Group Incorporated’s (UNH - Free Report) gain of 3.8% followed by more than 2% rise in shares of Amgen Inc. (AMGN - Free Report) and salesforce.com, inc. (CRM - Free Report) .

The tech-laden Nasdaq rallied higher led by more than 5% gain in shares of Advanced Micro Devices, Inc. (AMD - Free Report) , NVIDIA Corporation (NVDA - Free Report) , Okta, Inc. (OKTA - Free Report) and Xilinx, Inc. (XLNX - Free Report) .

On Thursday, the S&P 500 posted 90 new 52-week highs and no new lows, while the Nasdaq Composite recorded 97 new highs and 53 new lows.A total of 9.95 billion shares were traded yesterday, lower than the last 20-session average of 11.17 billion.

Retail Sales Soar in March

On Thursday, the Commerce Department reported that retail sales jumped 9.8% in March surpassing the consensus estimate of a 5.9% rise and previous months’ 2.7% decline. According to the report, fresh stimulus checks helped boost consumer spending in the last month, and sporting goods, clothing and food and beverage led the gains. The highlights of the report were a 13.4% surge in sales across the bar and restaurant industry due to restrictions easing. However, sporting goods spending emerged as the highest gainer in sales, witnessing a 23.5% increase. While clothing and accessories rales jumped 18.3% and motor vehicle parts and dealers gained 15.1%.

Initial Claims Sinks in Early April

The U.S. Department of Labor reported on Thursday that initial jobless claims for the week ending Apr 10 fell to a seasonally adjusted 576,000 from 769,000 in the prior week. The figures are much lower than the consensus estimate of 702,000 new claims. The number of initial claims dropped below 600,000 for the first time since the pandemic began a year and more ago and touched a new low. Initial jobless benefits claims fell the most in the states of California, Ohio, and Virginia. While the decline in California alone topped 75,000. The economic reopening has led to job openings and many companies are looking to add employees.

Q1 Earnings Report Roll Out

On Thursday, major banks reported the first-quarter 2021 earnings report that includes Bank of America Corporation (BAC - Free Report) and Citigroup Inc. (C - Free Report) . Additionally, bigwigs like UnitedHealth Group also came out with their quarterly report.

Bank of Americareported first-quarter 2021 earnings of 86 cents per share surpassing the Zacks Consensus Estimate of 65 cents. The company had stellar deal making activities in the reported quarter and advisory fees jumped 45% from the prior-year quarter. Net revenues jumped to $22.8 billion, which surpassed the Zacks Consensus Estimate of $21.9 billion. With improvement in consumer spending, Bank of America witnessed 13% growth in total card income on a year-over-year basis. However, the bank’s shares declined 2.9% in yesterday’s session. (Read More)

Citigroup reported first-quarter 2021 earnings of $3.62 per share that outpaced the Zacks Consensus Estimate of $2.56. The bank recorded higher market revenues during the reported quarter. Net income was $7.9 billion compared with the $2.5 billion recorded in the prior-year. However, revenues were down 7% year over year to $19.3 billion during the March-ended quarter, though it surpassed the Zacks Consensus Estimate of $18.9 billion. This banking giant’s shares failed to close in the green and declined 0.5% on Thursday. (Read More)

UnitedHealth Group reported first-quarter 2021 earnings of $5.31 per share surpassing the Zacks Consensus Estimate by 20%. The company’s revenues of $70.2 billion beat the Zacks Consensus Estimate by 1.9% and also improved 9% year over year. The better-than-expected results can be attributed to revenue growth at both Optum and, the community and senior benefit businesses of UnitedHealthcare. (Read More)

All the three aforementioned companies carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Economic Data

In a separate report, the Federal Reserve said on Thursday that the U.S. industrial production rose 1.4% in March, after a revised 2.6% fall in February that was caused by severe winter weather. Production report came in much lower than the consensus estimates of 2.6% rise, mainly due to steep decline in output from power utilities, as weather switched from unseasonably cold to unseasonably warm. Per the report, there was a 11.4% decline in output from utilities last month after a 9.2% gain in February. Output of motor vehicles and parts rose 2.8% and mining output, which includes oil and gas exploration, jumped 5.7%, both reversed their 10% and 5.6% decline in February, respectively.

Additionally, Capacity utilization rose to 74.4 from 73.4 in February and lower than the consensus estimates of 75.6.

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