S&P 500 Hits Fresh Record as Bond Yields Steady
Investing.com
Published Jul 09, 2021 01:55PM ET
Updated Jul 09, 2021 02:54PM ET
By Yasin Ebrahim
Investing.com – The S&P 500 hit fresh intraday record highs Friday, recovering from a slump a day earlier, led by financials as banks climbed strongly after U.S. bond yields steadied.
The S&P 500 rose 1.1%, hitting a record high of 4,269.20 The Dow Jones Industrial Average gained 1.30%, or 443 points, the Nasdaq was up 0.92%.
The U.S. bond yields found their footing as the 10-year yield recovered from a slip below 1.3% a day earlier. The move higher in yields sparked a bid in regional banking stocks, lifting the overall financial sector more than 2% higher.
State Street (NYSE:STT), Capital One Financial Corporation (NYSE:COF) and Synchrony Financial (NYSE:SYF) were among the biggest gains, up more than 4%.
Higher interest rates boost the return on interest that banks earn from their loan products, or net interest margin – the difference between the interest income generated by banks and the amount of interest paid out to depositors.
“The recent decline [in yields] appears to be rooted in a reassessment of second-half growth expectations. While data remains solid, a slower pace of expansion relative to record highs in the first half have undermined arguably overly optimistic forecasts for GDP going forward,” Stifel said in a note.
The rally in banking stocks comes just days before major Wall Street banks kick off the quarterly earnings season in earnest on Tuesday.
Tech stocks, meanwhile, also benefitted from strength in semiconductor stocks with Qualcomm (NASDAQ:QCOM) Taiwan Semiconductor Manufacturing (NYSE:TSM), and NXP Semiconductors NV (NASDAQ:NXPI) rising.
Big tech shrugged off further regulatory threats after President Joe Biden signed an order to increase competition in the biggest industries including tech.
Facebook (NASDAQ:FB), Google-parent Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT, and Apple (NASDAQ:AAPL) were above the flatline. Amazon.com (NASDAQ:AMZN) was slightly lower.
In other news, General Motors (NYSE:GM) gained nearly 5% after Wedbush initiated coverage on the stock with a buy rating, and said the automaker’s progress with battery technology could help it rack up market share against its rivals.
Get The News You Want
Written By: Investing.com
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.