S&P 500 gains, fails to eclipse its all-time high: markets wrap

US stocks climbed amid a rally in technology companies, while failing to top their all-time high as big banks sold off. Treasuries rose.

For a third time in the past week, the S&P 500 popped above its February closing record during the session, but ended below it. The American equity benchmark was still buoyed by fresh Chinese stimulus overnight and gains in giants such as Amazon.com and Google’s parent Alphabet, which drove the NYSE FANG+ Index up about 3%. The Nasdaq 100 outperformed amid a jump in Tesla and Nvidia Corp. as well as strong results from online retailer JD.com. Big banks sank after Warren Buffett’s Berkshire Hathaway pared stakes in many of the industry’s top names. Boeing Co. weighed on the Dow Jones Industrial Average.

The relentless rally in stocks has pushed the S&P 500 up more than 50% from its March lows amid large stimulus injections and better-than-expected economic and earnings data. Goldman Sachs Group’s David Kostin boosted his year-end price target for the gauge to 3,600 from 3,000, citing the firm’s above-consensus US growth expectations keyed off positive news on the vaccine front. He joined the likes of Yardeni Research founder Ed Yardeni and RBC Capital Markets’ Lori Calvasina who’ve raised their forecasts in recent weeks.

“The path of least resistance remains higher for stocks,” Paul Nolte, a portfolio manager at Kingsview Investment Management, wrote in a note. “The easy monetary policy, low interest rates and better economic data have been the fuel pushing stocks ever higher. Many of the historical supports, like earnings and strong balance sheets do not matter today. The speculative fervor has investors in its grip.”

Despite the rally, the fact that S&P 500 keeps failing to pierce its record could be a sign that gains may get harder to come by now. Chances for a deal in Congress on a new, comprehensive stimulus package before September diminish with each passing day. Democrats and Republicans are focused on their party presidential nominating conventions this week and next. Meanwhile, the almost daily drumbeat of tensions between the US and China shows little sign of letting up.

“Don’t bet against this bull market just yet,” Ryan Detrick, chief market strategist at LPL Financial LLC, said in a blog post about US stocks. This year marked the 10th time that the S&P 500 peaked with a 100-day gain of more than 25% since 1957, according to data compiled by Bloomberg. After the earlier highs, the S&P 500 rose an average of 8.8% in the next 12 months. The index advanced all but once, in 1987-88.

These are some of the main moves in markets:

Stocks

• The S&P 500 climbed 0.3% as of 4 p.m. New York time.
• The Stoxx Europe 600 Index advanced 0.3%.
• The MSCI Asia Pacific Index increased 0.4%.

Currencies

• The Bloomberg Dollar Spot Index fell 0.2%.
• The euro climbed 0.2% to $1.1868.
• The Japanese yen appreciated 0.6% to 105.98 per dollar.

Bonds

• The yield on 10-year Treasuries declined two basis points to 0.69%.
• Germany’s 10-year yield declined three basis points to -0.45%.
• Britain’s 10-year yield dipped three basis points to 0.216%.

Commodities

• The Bloomberg Commodity Index gained 1.7%.
• West Texas Intermediate crude increased 1.9% to $42.82 a barrel.
• Gold strengthened 1.9% to $1,982.05 an ounce.

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