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James Hyerczyk
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US Stock Indexes

The major U.S. stock indexes finished higher on Friday, setting new records in the process on the back of strong earnings from blue-chip companies as well as robust economic data that signaled a solid recovery from the pandemic was in the works.

In the cash market, the benchmark S&P 500 Index settled at 4185.47, up 15.05 or +0.36%. The blue chip Dow Jones Industrial Average finished at 34200.67, up 164.68 or +0.48% and the technology-based NASDAQ Composite closed at 14052.34, up 13.58 or +0.10%.

The S&P 500 Index scored three closing highs this week, while the Dow surpassed its best finish two days running. The tech-heavy NASDAQ Composite finished less than one percent below its own all-time closing high achieved on February 12.

Investor Sentiment Boosted by Slew of Economic Data

Housing starts surged 19.4% to a seasonally adjusted annual rate of 1.739 million units last month, the highest level since June 2006. Economists polled by Reuters had forecast starts would rise to a rate of 1.613 million units in March.

Permits for future home building rose 2.7% to a rate of 1.766 million units last month, recouping only a fraction of February’s 8.8% plunge. They jumped 30.2% compared to March 2020.

Inflation concerns were on consumers’ minds early this month. A separate report from the University of Michigan on Friday showed its preliminary consumer sentiment index rose to 86.5 from a final reading of 84.9 in March. Economists had forecast the index would rise to 89.6.

Finally, the survey’s one-year inflation expectation jumped to 3.7%, the highest level in nearly a decade, from 3.1% in March. Its five-year inflation outlook was unchanged at 2.7%.

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Strong Bank Earnings Reflect Snapback in Economy

The last of the six largest U.S. banks to report – Morgan Stanley – posted stronger-than-expected earnings, bolstered by strong trading and investment results. The bank reported a 150% jump in quarterly profit on Friday, joining the other U.S. banks in posting first-quarter numbers that reinforced hopes of a swift economic recovery. Still, the investment bank’s shares fell 2.8% as it also disclosed an almost $1 billion loss from the collapse of private fund Archegos.

PNC Financial gained more than 2% after the bank beat estimates on the top and bottom lines for its first-quarter report.

Meanwhile, shares of JPMorgan Chase & Co, Goldman Sachs Group, Bank of America Corp and Wells Fargo & Co rose between 0.7% and 3.8%. This helped the S&P Financials Index climb to a second consecutive record finish.

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