NEW YORK — Stocks were moderately higher in afternoon trading Thursday, helped again by large technology stocks that have benefitted from steady bond yields.
The easing of bond yields took some pressure off the technology sector. Technology companies have been slipping over the last few months as yields jumped and made the shares look pricey. The sector has also seen choppy trading as investors shift more money into companies that stand to benefit from the economic recovery.
The S&P 500 index was up 0.4% as of 1:01 p.m. Eastern. The gains by big technology stocks were tempered by a slide in banks and energy companies. The Dow Jones Industrial Average rose 4 points, or less than 0.1%, to 33,449 and the Nasdaq gained 0.9%.
The stock market has benefited this week from a cooling off in the bond market. Yields, which had been steadily ticking higher, have retreated from highs hit earlier in the month. The yield on the 10-year U.S. Treasury note fell to 1.64% from 1.65% late Wednesday. It had been as high as 1.75% on Monday.
Tech stocks were the biggest benefactors, with Apple and Microsoft shares up more than 1%. Amazon also rose roughly 1%.
Investors are showing cautious optimism about the economic recovery, especially in the U.S., where vaccine distribution has been ramping up and President Joe Biden has advanced the deadline for states to make doses available to all adults to April 19.
But it’s clear the economy has much to do when it comes to recovery. The number of Americans who filed for unemployment benefits last week rose again last week, as many businesses remain closed or partially shut down due to the pandemic.
Much of the economy is recovering, but employment needs to pick up in order for a full recovery to occur, analysts say. The market will likely continue to be choppy as investors shift money to some of the sectors and companies hardest hit by the pandemic. They are also weighing signs of economic growth against the lingering threat of COVID-19.
“We’re still at the mercy of the virus and the race between the virus and vaccines and getting a sense of the reopening of the economy,” said Liz Ann Sonders, chief investment strategist at Charles Schwab.
Shares were little changed a day earlier following the release of minutes from the Federal Reserve’s latest meeting on interest rates.
The minutes revealed that Fed officials were encouraged last month by evidence the U.S. economy was picking up, but they showed no sign of moving closer to ending their bond purchases or lifting their benchmark short-term interest rate from nearly zero. Federal Reserve Chair Jerome Powell is speaking in front of the International Monetary Fund today and could give investors more colour on what the Fed is thinking.
