By Geoffrey Smith
Investing.com -- The S&P 500 topped 4,000 points for the first time as Wall Street started the second quarter on a bright note, shrugging off any disappointment about a surprise increase in initial jobless claims last week.
By 9:40 AM ET (1340 GMT), the S&P 500 was up 0.7% at 4,001.28 points, while the Dow Jones Industrial Average was up 70 points, or 0.2% at 33,051 points. However, the Nasdaq Composite was outshining both with a gain of 1.5%, with chipmakers making notable gains on the back of strong outlooks from Micron (NASDAQ:MU) and Taiwan Semiconductor Manufacturing.
Earlier, the Labor Department had said that the number of initial claims for jobless benefits rose last week, surprisingly, to 714,000. However, the broader number of those claiming under all unemployment related benefit programs fell by over 1.5 million to 18.2 million, resuming its downward trend. Any disappointment was offset by a sharp upward revision to the Institute of Supply Management's purchasing managers index for March, which rose to within a whisker of its record high.
Overnight, Taiwan Semiconductor Manufacturing (NYSE:TSM) had said it will throw $100 billion over three years at expanding manufacturing capacity, the most dramatic response yet to the global shortage of chips that has been created by a surge in demand for electronics due to the pandemic and new technologies accelerated by the advent of 5G. TSM stock rose 4.6% on the news, despite giving few details as to how it will pay for the investment.
Micron Technology (NASDAQ:MU) stock rose 6.3% after it reported solid earnings and upbeat guidance. The stock was also supported by a report linking it with a bid for Japanese memory chip maker Kioxia. Other chipmakers rose in sympathy, with Advanced Micro Devices (NASDAQ:AMD) stock rising 2.0% and Nvidia (NASDAQ:NVDA) stock rising 2.2%
Elsewhere, Tesla (NASDAQ:TSLA) stock extended recent gains, rising 2.8% on a Reuters report saying that a Chinese joint venture of Volkswagen (DE:VOWG_p) will buy emissions credits from it for the current year. The report was a reality check for those who have touted VW’s progress in making the transition to e-mobility, and reflected the reality that it is still producing far more conventionally powered vehicles than electric ones. It also underlined that Tesla's first-mover advantage in making zero-emission cars is still contributing directly to its bottom line. The news also supported other pure EV makers, including Xpeng and Nio (NYSE:NIO).
Quantumscape (NYSE:QS) stock, meanwhile, rose over 12%, after the developer of solid-state lithium batteries said it had met the contractual conditions for unlocking a further $100 million investment from Volkswagen.
Oil and gas stocks were supported broadly by signs coming out of this month's 'OPEC+' meeting that the world's biggest exporters will keep production at its current level for another month in response to the dip in demand from a rising wave of Covid-19 cases in India, Europe and South America. ConocoPhillips (NYSE:COP) stock was up 1.7%, while Occidental Petroleum (NYSE:OXY) stock was up 3.2%.