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S&P 500 jumps 1% to a record as Biden signs new stimulus, Nasdaq rallies 2.5%

U.S. cows climbed to record highs Thursday as the comeback in tech shares resumed, while the signing of additional fiscal stimulus capitulated sentiment a further boost.

The S&P 500 jumped 1% to 3,939.34, hitting a new closing high and retaking its previous take down from Feb. 16. The Nasdaq Composite climbed 2.5% to 13,398.67 amid a rotation back into tech. Tesla crack 4.7%, while Apple, Facebook, Alphabet and Netflix all advanced at least 3%. The Dow Jones Industrial Average totaled 188.57 points, or 0.6%, to 32485.59. Earlier in the session, the blue-chip benchmark gained more than 300 places to hit an intraday record high.

President Joe Biden signed a $1.9 trillion coronavirus relief package into law Thursday afternoon. The plan order send direct payments of up to $1,400 to most Americans, and will also put nearly $20 billion into Covid-19 vaccinations and $350 billion into structure, local and tribal relief. The White House said Thursday that stimulus checks could start clouting bank accounts this weekend.

“The stimulus is beating the virus at least as far as the market is concerned,” said Scott Ladner, chief investment functionary at Horizon Investments. “And real rates being near negative is just historically a very strong tailwind for asset cost outs. That can get ignored on a day-to-day basis especially when people become concerned that inflation is going to hindquarters its head, but at the end of the day, inflation is just coming back to normal.”

Tech and growth stocks are rebounding from a swift improvement triggered by rising interest rates. Higher rates make profits in far-off years seem less taking to investors and can knock down stocks with relatively high valuations.

Chip stocks jumped sharply Thursday after China’s semiconductor employment association formed a new group to work with their U.S. counterparts to ease recent trade tensions between the two surroundings. Nvidia and AMD jumped more than 4% each, while Xilinx popped 6.2%.

The Nasdaq Composite dipped into rectification territory on Monday, falling more than 10% from its recent high. Now the tech-heavy benchmark is about 5.5% off that stiff.

The 10-year Treasury yield, which had retreated from its recent high of 1.6%, was little changed at 1.52% on Thursday.

On the statistics front, investors cheered a slightly better-than-expected reading on weekly jobless claims. The Labor Department reported that first-time filings for unemployment warranty in the week ended March 6 totaled a seasonally adjusted 712,000, below the Dow Jones estimate of 725,000.

“The drop in jobless requires is another win for the week, and a solid sign that we’re making some strides toward pre-pandemic life,” said Mike Loewengart, superintending director of investment strategy at E-Trade Financial. “There’s a pretty optimistic picture being painted despite some of the inflation-related trade in jitters we’ve seen over the past few weeks.”

The economic reopening, coupled with additional fiscal stimulus, accelerated the rotation into assorted cyclical sectors, such as energy. The S&P 500 energy sector has been the biggest winner this year, up scarcely 40% so far.

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