Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

S&P 500, Dow in Record Climb as Signs of Consumer Strength Boost Cyclicals

Stock MarketsJul 29, 2021 19:28
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters.

By Yasin Ebrahim – The S&P 500 climbed to a fresh record high Thursday, shrugging off disappointing second-quarter U.S. growth amid signs consumer spending remains healthy.

The S&P 500 rose 0.6% after hitting a record of 4,430.20. The Dow Jones Industrial Average gained 0.6%, or 215 points to a record of 25,171.52. The Nasdaq was up 0.3%.

Real gross domestic product grew at 6.5% annual rate in the second quarter, missing expectations for nearly 8.5% growth. But, a deeper look at the components of the growth gave plenty of reason for optimism as consumer spending topped expectations.

“The data was disappointing […] but the details were quite constructive,” Jefferies (NYSE:JEF) said in a note. “Consumption was stronger than expected, rising by 11.8% annualized, and so was business investment, which rose 8%.”

The upside surprise in consumer spending offset weekly jobless claims data, supporting the economically-linked cyclical stocks including energy, materials and financials.

Energy was leading to the upside as oil prices climbed amid a fall in the dollar, though rising Covid-19 cases continue to muddy the outlook for energy demand.  

Financials were boosted by jump in regional banking stocks even as Treasury yields lost momentum and slipped into the red.

Cincinnati Financial (NASDAQ:CINF) was up more than 3% after reporting better-than-expected earnings.

Lower interest rates hurt the return on interest that banks earn from their loan products, or net interest margin – the difference between the interest income generated by banks and the amount of interest paid out to depositors.

In technology, Facebook (NASDAQ:FB) was down more than 3% after the social media giant warned that Apple’s privacy policies tweaks will weigh on advertising revenue.

“Management expects to see a significant slow down in y/y growth, and a moderate sequential decline in the two-year growth rates in 2H which is above our previous estimates but essentially in line with the current consensus, and a forecast less positive than peers, in our view. The forecast is partially being driven by headwinds from Apple's ATT starting to have an impact,” Wedbush said in a note.

Other megacap tech stocks were in the ascendency. Google-parent Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT, Apple (NASDAQ:AAPL), were higher, while (NASDAQ:AMZN) fell. is set to report second-quarter results after the closing bell Thursday.

A rise in chip stocks also supported the broader tech sector, led by gains in the Advanced Micro Devices (NASDAQ:AMD) and Qualcomm.

Qualcomm (NASDAQ:QCOM) rose more than 3% after reporting quarterly results that topped analysts estimates, and the chipmaker delivered a positive outlook ahead amid expectations for easing supply chain woes.

The gains in the broader market come just a day after Federal Reserve chairman Jerome Powell hinted that the central bank tapering goal would need more time to assess the progress the economy has made toward the threshold to begin tapering bond purchases. 

In other news, Robinhood Markets (NASDAQ:HOOD) fell 10% on its trading debut to trade below its initial public offering price of $38 a share.

Electric vehicle start-up Nikola Corp (NASDAQ:NKLA), meanwhile, slumped 7% after the company’s founder Trevor Milton was changed by Federal prosecutors with making false statements to drive up demand for the company’s stock.

S&P 500, Dow in Record Climb as Signs of Consumer Strength Boost Cyclicals

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email