By Damian J. Troise and Alex Veiga
Technology companies led broad gains for stocks on Wall Street Thursday, ending a three-day losing streak for major U.S. indexes.
Investors were encouraged by the latest jobs data that showed fewer Americans filing for unemployment benefits, another sign that the economic recovery is underway.
The S&P 500 gained 1.1%. The benchmark index is still on track for its second straight weekly loss.
Technology and communications stocks accounted for much of the market rally. Apple rose 2.1% and Google’s parent, Alphabet, rose 1.6%. Nearly every sector in the S&P 500 made gains, though a drop in oil prices dragged energy sector stocks lower. The sector remains the biggest gainer so far this year with a 36% gain.
Investors continue to be focused on the potential for inflation down the road. Prices for everything from gasoline to lumber have been rising sharply this year as the economy reheats after the pandemic, and investors have been worried that high inflation may cause the Federal Reserve to pull back on its stimulus efforts.
“There’s a bit of churning going on in the markets,” said Tom Martin, senior portfolio manager with Globalt Investments. “Here we are near all-time highs on the S&P 500, and there’s so much uncertainty about what is actually happening with inflation, how long it’s going to last and how the Fed will react.”
The S&P 500 rose 43.44 points to 4,159.12. The Dow Jones Industrial Average added 188.11 points, or 0.6%, to 34,084.15. The technology heavy Nasdaq fared better than the rest of the market, climbing 236 points, or 1.8%, to 13,535.74.
Small company stocks also notched gains. The Russell 2000 index picked up 14.12 points, or 0.6%, to 2,207.76.
Several retailers were among the biggest decliners in the S&P 500. Gap dropped 1.4%, while L Brands skidded 2.6%. Ross Stores lost 2.7%.
The number of Americans seeking unemployment aid fell last week to 444,000, a new pandemic low and a sign that the job market keeps strengthening as consumers spend freely again, viral infections drop and business restrictions ease.
Part of that decline may be fueled by Republican governors who have opted not to allow their residents to claim the $300-a-week supplemental benefit that came with the latest economic relief package. The move could be pushing more people back into the labor market.
Treasury yields mostly fell, despite the positive economic data. The yield on the 10-year Treasury note slipped to 1.63% from 1.67% late Wednesday.
Oatly, the largest maker of oat milk in the world, jumped 18.8% on its first day of trading on the Nasdaq Stock Exchange. The company raised $1.5 billion as part of its initial public offering.
Digital currencies fell sharply Wednesday after China’s banking association issued a warning over the risks associated with digital currencies. On Thursday the price of Bitcoin regained some ground, adding 4.4% to roughly $40,213, according to the online brokerage Coinbase.
Updated on May 20, 2021, at 4:42 p.m. ET.
