Tech stocks surge again as market takes aim at record highs

Wall Street is on a tear again Thursday, with tech stocks surging and both the Dow and the S&P 500 on track for new record highs.

The tech-heavy Nasdaq Composite registered the biggest gains, up 2.5% midday. The Dow, meanwhile, climbed 1.1%, or nearly 350 points, while the S&P is up 1.4%.

Spring has sprung and equity investors are in the spirit: They’re feeling optimistic about the $1.9 trillion stimulus package Congress passed this week, as well as the eventual reopening of the economy.

“Trends related to Covid continue to show improvement on both a national and international basis, as vaccine doses continue to pile up across the country,” said Bespoke Investment’s Paul Hickey.

Bond yields, which climbed recently on worries that an inflation spike would force the Federal Reserve to raise rates sooner rather than later, have fallen back again. Those fears were calmed in part by Wednesday’s inflation report, which was in line with economists’ expectations.

The 10-year US Treasury yield was up 0.01% at 1.53% around midday on Thursday. Bond yields and prices move in opposition to each other.

“It is becoming clear that investors are not sure what to do with stocks at these levels,” Fawad Razaqzada, market analyst at Think Markets, wrote in a note to clients.

“Some are still keen to keep buying equities, especially those sensitive to the economy, ahead of the arrival of stimulus checks,” Razaqzada added, “while others are happy to book profit after a remarkable rally over the past year or so.”

Thursday’s economic data also helped shore up optimism: Weekly first-time claims for unemployment benefits came in lower than economists had predicted, and they also fell from the prior week. It might be a sign that the US jobs recovery is finally gathering steam.

Even so, with 712,000 seasonally adjusted initial claims filed last week, the number of workers requiring benefits is still higher than during the peak of the Great Recession.