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US Shares Rise in Anticipation of Fast-Paced Economic Growth

By:
James Hyerczyk
Published: Mar 26, 2021, 03:35 UTC

Bank stocks rose after the Fed announced that banks could resume buybacks and raise dividends starting at the end of June.

US Stock Market

In this article:

The major U.S. stock indexes closed higher following a late-session rally on Thursday as investors bought stocks they expect to outperform during the strengthening U.S. recovery. Meanwhile, investors also gobbled up beaten-down Apple and Tesla shares, in anticipation of one of the fastest paced growth trends in decades this year.

In the cash market on Thursday, the benchmark S&P 500 Index is trading 3909.52, up 20.38 or +0.52%. The blue chip Dow Jones Industrial Average finished at 32619.48, up 199.42 or +0.62% and the technology-based NASDAQ Composite closed at 12977.68, up 15.79 or +0.12%.

Fed policymakers and many private forecasters are expecting a surge in spending and economic growth in coming months as more Americans get vaccinated and venture out. Powell underscored that expectation but at the same time reiterated the Fed’s commitment to use “our full range of tools to support the economy and to help assure that the recovery from this difficult period will be as robust as possible.”

Positive Labor Market News

The labor report on Thursday showed claims for unemployment benefits dropped to a one-year low last week, a sign that the U.S. economy is on the verge of stronger growth as the public health situation improves and temperatures rise.

President Joe Biden cited as economic progress Labor Department data that showed a declining number of Americans claimed unemployment insurance, news investors shrugged off earlier as Wall Street traded lower most of the session.

Bank Stocks Rise on Buyback, Dividend News

Bank stocks rose after the Fed announced that banks could resume buybacks and raise dividends starting at the end of June. The central bank originally said it would lift pandemic era restrictions in the first quarter, but even the delayed move gives investors more clarity.

Treasury Secretary Janet Yellen on Wednesday said U.S. banks look healthy enough to be allowed to pay dividends and repurchase stock, an updated view that reflects top economic officials’ growing confidence in the recovery from the coronavirus pandemic.

Yellen made her comments in a second day of testimony in Congress alongside Federal Reserve Chair Jerome Powell. The hearings are part of a quarterly coronavirus aid update they are required to make.

Other News

Shares of Nike Inc fell as the sporting goods giant faced a Chinese social media backlash over its comments about reports of forced labor in Xinjiang.

Darden Restaurants Inc surged after it announced a new share buyback plan and forecast upbeat fourth-quarter revenue and profit.

Shares of JPMorgan and Citigroup rose slightly in extending trading, along with other major banks.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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