Nasdaq, S&P 500 scale new peak as jobs recovery gains traction

(Reuters) – The Nasdaq and the S&P 500 indexes hit all-time highs on Thursday, boosted by shares of Tesla and other top-shelf technology firms as data showing fewer weekly jobless claims bolstered views of a steady recovery in the labor market.

Initial claims for state unemployment benefits fell 7,000 to 411,000 for the week ended June 19, the Labor Department said on Thursday, but were still higher than the 380,000 that economists had forecast.

A separate report from the Commerce Department on Thursday confirmed economic growth accelerated in the first quarter, thanks to the massive fiscal stimulus.

Tesla Inc rose 3.8% after Chief Executive Officer Elon Musk said he would list SpaceX’s space internet venture, Starlink, when its cash flow is reasonably predictable, adding that Tesla shareholders could get preference in investing.

Mega-cap tech names such as Apple Inc, Microsoft Corp, Google-owner Alphabet Inc, Netflix Inc and Facebook Inc also gained between 0.5% and 0.8% and were among the biggest boosts to the S&P 500 and the Nasdaq.

“That’s more of a reflection of people’s confidence of coming back into markets,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in New York.

“How long it’s going to last is the question. If you see a rise in interest rates then some of that confidence maybe shaken.”

So far this month, the value index, which includes economy-linked energy, financial and industrial stocks, is lagging its tech-heavy growth counterpart despite maintaining a strong lead year-to-date.

“People are going to see more and more that value has become more expensive and growth stocks, which were seen as overvalued, have become cheaper and an opportunity for longer-focused investors,” Pavlik said.

Focus was also on Biden’s meet with a bipartisan group of U.S. senators on Thursday to discuss their proposed framework for an infrastructure bill as he looks to push a large-scale spending package through Congress despite Republican opposition.

At 9:59 a.m. ET, the Dow Jones Industrial Average was up 259.96 points, or 0.77%, at 34,134.20, the S&P 500 was up 23.05 points, or 0.54%, at 4,264.89, and the Nasdaq Composite was up 105.09 points, or 0.74%, at 14,376.83.

Technology, healthcare and communication services sector indexes were at their peaks.

Eli Lilly and Co jumped 8.5% after the drugmaker said it would apply for the U.S. Food and Drug Administration’s accelerated approval for its experimental Alzheimer’s drug this year.

In response, Biogen Inc, which received a controversial approval for its Alzheimer’s drug aducanumab earlier this month, dropped 5%.

MGM Resorts International rose 3.8% after Deutsche Bank upgraded the casino operator’s stock to “buy” from “hold”.

Accenture Plc gained 2.5% after the IT consulting firm raised its full-year revenue forecast.

Advancing issues outnumbered decliners by a 2-to-1 ratio on the NYSE and by a 2.1-to-1 ratio on the Nasdaq.

The S&P 500 posted 30 new 52-week highs and one new low while the Nasdaq recorded 95 new highs and 11 new lows.

Graphic: S&P 500 Forward PE –

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