New York Stock Market Closes Higher on Strength in Cyclical Stocks (Comprehensive)

Declined Immediately After Powell's Remarks but Turned Bullish
Expectations for Accelerated US Economic Recovery and Vaccine Expansion
Dollar Strengthens Amid Stable Treasury Yields

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The New York stock market recorded gains centered on cyclical stocks amid strong economic indicators.

On the 25th (local time), the Dow Jones Industrial Average rose 199.42 points (0.62%) from the previous close to 32,619.48, the S&P 500 index increased by 20.38 points (0.52%) to 3,909.52, and the Nasdaq index closed up 15.79 points (0.12%) at 12,977.68.

On that day, major indices started off weak despite strong employment data released before the opening and an upward revision of last year's fourth-quarter economic growth rate, as Federal Reserve (Fed) Chairman Jerome Powell hinted at tapering asset purchases.

In an interview with NPR, Chairman Powell said, "At some point, we will have to taper asset purchases," and predicted that the process would be transparent and gradual. Powell's remarks acted as a factor for the market decline.

The Department of Labor announced that the number of new unemployment claims last week decreased by 97,000 from the previous week to 684,000. This is the first time in a year that new unemployment claims have fallen to the 600,000 range.

The Department of Commerce announced that the final GDP growth rate for the fourth quarter of last year was 4.3%. This was 0.2% higher than the previously announced preliminary figure of 4.1%.

However, with the expansion of gains centered on cyclical stocks, all three major New York stock indices succeeded in rising. President Joe Biden set a goal to complete 200 million COVID-19 vaccinations within his first 100 days in office, spreading expectations for economic recovery.

Airline and travel stocks were strong. American Airlines and United Airlines rose more than 4%. Boeing also showed gains in the 3% range. Cruise-related stocks such as Carnival Cruises also showed strong gains in the 4% range. Financial stocks were also strong, with American Express Card rising 2.7% amid expectations of increased consumer spending.

Apple, which had been weak, rebounded 0.5%, and Tesla rose 1.61%. Coupang fell 0.21%.

As the U.S. Congress held hearings on social media companies, SNS companies such as Facebook and Twitter showed declines in the 1% range.

GameStop, which had recently experienced deep declines, showed extreme volatility with a sharp rebound of 50%.

Due to reports that the U.S. Securities and Exchange Commission (SEC) will implement delisting regulations for Chinese-listed companies, Baidu fell 14%, and Alibaba dropped 2%.

U.S. Treasury yields fell to the 1.5% range during the day but rose back to the 1.62% range after the results of the 7-year bond auction in the afternoon fell short of expectations.

Although interest rates are stabilizing, the value of the U.S. dollar continues to soar. The dollar index, which shows the value of the dollar against major currencies, rose 0.42% to 92.91 that day.

The dollar remains strong despite a $1.9 trillion stimulus package and the outline of a $3 trillion infrastructure investment plan. This reflects the situation where COVID-19 is resurging in Europe, while the U.S. is recovering economic vitality through expanded vaccinations.

At the New York Mercantile Exchange, the May West Texas Intermediate (WTI) crude oil price closed sharply down $2.62 (4.3%) at $58.56 per barrel.

This content was produced with the assistance of AI translation services.