Wall St rises on upbeat US economic data

·3-min read

The S&P 500 has reached its sixth consecutive all-time closing high as a new quarter and the second half of the year began with upbeat economic data and a broad-based rally.

Investors now eye Friday's much-anticipated employment report.

The bellwether index is enjoying its longest winning streak since early February and the last time it logged six straight all-time highs was last August.

"Historical data shows if you have a strong first half, the second half of the year was actually going even stronger," said Ross Mayfield, investment strategy analyst with Baird Private Wealth.

All three major US stock indexes ended the session in positive territory but a decline in tech shares - led by microchips - tempered the Nasdaq's gain.

The Philadelphia SE Semiconductor index slid 1.5 per cent.

"For markets so far this year, boring is beautiful," said David Carter, chief investment officer at Lenox Wealth Advisors in New York.

"Economic growth has been strong enough to support prices and many asset classes are trading with historically low volatility."

"It feels like investors left for the Fourth of July weekend about three months ago."

The ongoing worker shortage, attributed to federal emergency unemployment benefits, a childcare shortage and lingering pandemic fears, was a common theme in the day's economic data.

Jobless claims continued their downward trajectory according to the Labor Department, touching their lowest level since the pandemic shutdown, and a report from Challenger, Gray & Christmas showed planned lay-offs by US firms were down 88 per cent from last year, hitting a 21-year low.

Activity at US factories expanded at a slightly decelerated pace in June, according to the Institute for Supply Management's (ISM) purchasing managers' index (PMI), with the employment component dipping into contraction for the first time since November.

The prices paid index, driven higher by the current demand/supply imbalance, soared to its highest level since 1979, according to ISM.

"The employment and manufacturing data released today supported the idea of continued growth but at a decelerated rate," Carter added.

Friday's hotly anticipated jobs report is expected to show payrolls growing by 700,000 and unemployment inching down to 5.7 per cent.

A robust upside surprise could lead the US Federal Reserve to adjust its timetable for tapering its securities purchases and raising key interest rates.

"Too-strong economic data could perversely be a bad thing for markets if it caused the Fed to raise rates faster than expected," Carter said.

"Weak employment data may actually be welcomed."

The Dow Jones Industrial Average rose 131.02 points, or 0.38 per cent, to 34,633.53, the S&P 500 gained 22.44 points, or 0.52 per cent, to 4,319.94 and the Nasdaq Composite added 18.42 points, or 0.13 per cent, to 14,522.38.

Of the 11 major sectors in the S&P 500, consumer staples was the sole loser, shedding 0.3 per cent.

Walgreens Boots Alliance Inc dropped 7.4 per cent after it said it expects to administer fewer COVID-19 vaccine shots in the fourth quarter.

Didi Global Inc jumped 16 per cent on its second day of trading as a US-listed company.

Micron Technology Inc slid by 5.7 per cent following a report that Texas Instruments would buy Micron's Lehi, Utah, factory for $US900 million ($A1.2 billion).

Advancing issues outnumbered declining ones on the NYSE by a 1.78-to-1 ratio; on Nasdaq, a 1.32-to-1 ratio favoured advancers.

The S&P 500 posted 36 new 52-week highs and no new lows; the Nasdaq Composite recorded 78 new highs and 30 new lows.

Volume on US exchanges was 9.53 billion shares compared with the 10.9 billion average over the last 20 trading days.

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