US markets rise on last trading day of the week

U.S. equity futures were trending higher ahead of Friday’s opening bell as stocks rose this week and market volatility plummeted, reflecting investor concerns over higher inflation and a stricter monetary policy.

A recovery in the US economy is a boon for this export-oriented region. Although vaccine deployment in Asia has been delayed in most parts of the United States and Europe, the benefit of an overseas recovery is likely to come long before herd immunity to herd. coronavirus pandemic.

On Wall Street, the S&P 500 set a new all-time high, beating the peak it reached early last week. Shares increased gains in the afternoon after Biden announced the infrastructure deal, which is sure to benefit construction companies.

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Caterpillar rose 2.6% and Vulcan Materials gained 3.3% on the news.

The plan, which costs $ 973 billion over five years, is the culmination of months of talks, and a bigger spending plan from Biden is still possible later this year.

Chris Zaccarelli, chief investment officer of the Independent Advisor Alliance, said the proposed deal is favorable to industrials, financials and energy, although “the general reopening of the economy and renewed post-COVID-19 economic growth are the most likely driver “of the market in the future.

The S&P 500 Index rose 24.65 points, or 0.6%, to 4,266.49. The Dow Jones Industrial Average rose 322.58 points, or 1%, to 34,196.82. The Nasdaq added 97.98, or 0.7%, to 14,369.71.

Small business stocks outperformed the rest of the market. The Russell 2000 Index climbed 30.15 points, or 1.3%, to 2,333.62.

Markets have calmed down since the Federal Reserve surprised investors last week by saying it could start raising short-term interest rates by the end of 2023, sooner than expected, if the recent high inflation persists.

The very low rates the Fed designed to push the economy through the pandemic have supported prices in all markets, and any change would be a big deal, so the Fed’s announcement triggered a sell off of shares. and an increase in Treasury yields last week. However, that sale reversed this week. The three major indices are all up more than 2% this week and are again close to record highs.

Investors have had little negative reaction to a report that 411,000 Americans filed for unemployment benefits last week, down 7,000 from the previous week. It was a much smaller drop than expected, and the second week in a row that jobless claims stalled after declining steadily for months.

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At the same time, orders from US factories for expensive manufactured goods increased for the 12th time in the past 13 months in May, driven by strong demand for civilian planes. The Commerce Department said on Thursday that durable goods orders – expected to last at least three years – rose 2.3% in May, reversing a 0.8% drop in April and despite a lagging supply chain and a shortage of workers.

Rite Aid plunged 14.5% after the drugstore chain said it expects a loss for the year, due to pressure on its pharmacy services and weaker than expected sales.

Eli Lilly rose 7.3% after the Food and Drug Administration gave fast-track approval to the Alzheimer’s drugmaker’s experimental treatment.

BuzzFeed has announced that it will go public with an implied value of $ 1.5 billion through a merger with a specialist acquisition company. The media company will trade under the symbol BZFD but has not yet chosen a stock exchange.

Meanwhile, Asian stocks rose on Friday, buoyed by a rally on Wall Street that came after Biden announced a bipartisan deal on infrastructure spending.

Japan’s Nikkei 225 benchmark jumped 0.7% in afternoon trading to 29,067.13. South Korea’s Kospi gained 0.5% to 3,301.76. The Australian S & P / ASX 200 was up 0.6% to 7,315.00. The Hong Kong Hang Seng jumped 1.3% to 29,246.23, while the Shanghai Composite rose 1.1% to 3,606.50.

“The breakthrough in overnight infrastructure spending talks raised sentiment with spending plans historically positive for markets,” said Yeap Jun Rong, market strategist at IG in Singapore. “Sectors that lean towards economic recovery and reopening can see strength.”

Shares of Japanese electronics company Panasonic Corp. climbed more than 4% after confirming that it had sold all of the Tesla Inc. shares it owned, worth around 400 billion yen ($ 3.6 billion). Panasonic said the partnership with the U.S. electric vehicle company would continue, but wanted cash for future investments, without disclosing details.

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In energy trading, benchmark US crude was unchanged at $ 73.30 per barrel. Brent crude, the international standard, also remained unchanged at $ 75.56 per barrel.

In currency trading, the US dollar edged down to 110.82 Japanese yen from 110.87 yen. The euro cost $ 1.1939, compared to $ 1.1930.