The Dow Jones Industrial Average and the S&P 500 closed at new record highs on Monday, propelled by a blockbuster jobs report and fresh data on the US services sectors that have Wall Street bulls betting on a strong US economic recovery.
The Institute for Supply Management said on Monday that its gauge of US services sector activity jumped to 63.7 in March – the highest reading ever and a full 8.7 percentage points higher than February.
The gains come against a backdrop of warming temperatures, rollbacks of COVID-19 restrictions by state and local governments and more Americans getting vaccinated against the coronavirus.
The good news on the country’s services sector also followed on the heels of Friday’s stellar jobs report. The US economy added 916,000 jobs in March – the biggest gain in seven months.
“Vigorous services activity in March sets the stage for robust expansion in Q2,” wrote Oxford Economics lead US economist Oren Klachkin in a note to clients on Monday. “All the right pieces for a faster services recovery – expanded vaccine eligibility, reopenings, and historic fiscal expansion – are falling into place.”
That recipe helped boost spirits on Wall Street. The Dow finished the session up more than 373 points or 1.13 percent at 33,527.19 – a new record.
Gains were broad-based with technology, consumer non-cyclicals, and industrials leading the charge.
The broader S&P 500 Index, a proxy for the health of US retirement and college savings plans, finished the session up 1.44 percent at 4,077.91 – also a new record.
The tech-heavy Nasdaq Composite Index gained 1.67 percent on the day to finish at 13,705.593.
Among stocks making headlines on Monday:
Tesla shares gained more than 4.42 percent after the electric vehicle maker reported record deliveries in the first quarter of this year that beat Wall Street’s expectations.
And shares of Reddit-fuelled day trader favourite GameStop Corp finished the session down 2.35 percent after the video-game retailer said it may sell up to $1bn worth of new shares.