Daily Management Review

S&P 500, Dow Jones rise to record highs on labour market and services news


On 5 April, the S&P 500 and Dow Jones US stock indices hit new all-time highs, with the S&P 500 up 1.4% to 4,077 points and the Dow Jones up 1.2% to 33,559 points. Another index, NASDAQ, also rose 1.4% to 13,664 points.

The indices growth was caused by several economic reports with good results for March published on Monday. The first of them was the Unemployment and Employment report that showed that 916,000 jobs were created in the US during March, the highest number since August last year. The unemployment rate fell slightly in the period, by 0.2 percentage points to 6%.

Another cause for investors' optimism was the data on the index of business activity in the service sector, presented by the Institute for Supply Management. The index rose quite strongly - from 55.3% in February to 63.7% in March, being also much better than analysts' expectations - they forecasted 59.2%. Index values above 50% indicate growth in the sector.

Recovery in the service sector, which was particularly hard hit by the pandemic, has lagged behind industry growth, so investors have reacted optimistically to growth in this sector.

source: bloomberg.com