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Stock Market News for May 4, 2021

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U.S. stock markets closed mixed on the first trading day of May. Reopening stocks gained while tech bigwigs' shares dropped. Economic data those were released also mixed. The Dow and the S&P 500 ended in green while the Nasdaq Composite finished in red.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) was up 0.7% or 238.38 points to close at 34,113.23. Notably, 23 components of the 30-stock blue-chip index ended in the green while 7 in red. The tech-heavy Nasdaq Composite finished at 13,895.12, tumbling 0.5% due to weak performance by large-cap technology stocks.

Meanwhile, the S&P 500 rose 0.3% to end at 4,192.62. The Energy Select Sector SPDR (XLE), the Materials Select Sector SPDR (XLB), the Health Care Select Sector SPDR (XLV) and  the Industrials Select Sector SPDR (XLI) rallied 2.8%, 1.5%, 1.1% and 1%, respectively. 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 down 1.6% to 18.31. A total of 10.29 billion shares were traded on Monday, higher than the last 20-session average of 9.86 billion. Advancers outnumbered decliners on the NYSE by a 2.31-to-1 ratio. On Nasdaq, a 1.03-to-1 ratio favored advancing issues.

Reopening Stocks Gain

The U.S. government has accelerated nationwide COVID-19 vaccination. More than 30 million Americans have been vaccinated so far. The three FDA approved COVID-19 vaccine manufacturers have ramped-up productions. Moreover, the rate of coronavirus infections remained subdued in the United States.  

Speeding up of vaccination process and easing pandemic brighten investors' hope of faster-than-expected reopening of the economy. New York Governor Andrew Cuomo announced that most of the restrictions imposed by the state government in order to maintain social distancing will be lifted across New York, New Jersey and Connecticut, while 24-hour subway service will resume in New York City later this month.

Consequently, shares of reopening stocks like Dillard's Inc. (DDS - Free Report) , Macy's Inc. (M - Free Report) The Gap Inc. (GPS - Free Report) , Urban Outfitters Inc. (URBN - Free Report) and Kohl's Corp. (KSS - Free Report) surged 9.7%, 8%, 7.2%, 6.1% and 5.4%, respectively. Dillard's and Macy's carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Economic Data

The Institute of Supply Management (ISM) reported that its manufacturing purchasing managers' index (PMI) fell to 60.7% in April from a 38-year high of 64.7% in March. The consensus estimate was 65. Any reading above 50% indicates expansions in manufacturing activities.

The ISM said that despite strong pent-up demand, most of the manufacturers are suffering from growing input prices owing to widespread shortages of parts, materials and labor. The price sub-index climbed to a 13-year high 89.6% in April from 85.6% in March.

Manufacturers are concerned that continuation of this situation may derail strong performance of this segment of the economy. Notably, in the pandemic-ridden past year, U.S. manufacturing witnessed a V-shaped recovery.

However, in contrast to the SM survey, the IHS Markit reported that its Manufacturing Business Activity PMI Index jumped to a record-high 60.5% in April.

Construction spending in March grew 0.2% compared with the consensus estimate of 1.8%. February's data was revised upward from a decline of 0.8% to a decline of 0.6%.

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