Stocks Hit Record on Bets Economy Is Pushing Ahead: Markets Wrap

(Bloomberg) -- Stocks climbed to an all-time high as President Joe Biden’s bipartisan $579 billion infrastructure deal added to optimism the economic recovery is taking hold. The dollar fell.

Companies that stand to benefit the most from a rebound in activity outperformed -- with financial and energy shares leading gains in the S&P 500. Caterpillar Inc., the world’s biggest maker of mining and construction equipment, jumped alongside raw-material producers such as U.S. Steel Corp. and Nucor Corp.

In late trading, FedEx Corp. slumped as a plan to bolster investments signaled potential pressure on the company’s profit. Meantime, some of the biggest banks climbed as the Federal Reserve’s stress tests showed the industry built up a stockpile of cash during the pandemic. That means a potential deluge of dividend increases and stock buybacks.

The bipartisan legislation is expected to move through Congress alongside a separate bill that would spend trillions more on what Biden called “human infrastructure” that the GOP opposes. Earlier Thursday, Atlanta Fed President Raphael Bostic and his Philadelphia counterpart Patrick Harker urged more spending on infrastructure investment -- noting that it could boost U.S. productivity and growth.

“Infrastructure spending strengthens an already very strong economic growth outlook,” said Jeff Buchbinder, equity strategist at LPL Financial. Those investments will “bolster the outlook for corporate profits and should keep this bull market going strong well beyond 2021,” he added.

Data Thursday showed applications for U.S. state unemployment insurance fell slightly last week, though were higher than forecast, while orders for durable goods rose in May at the fastest pace since January.

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Here are some events to watch this week:

• U.S. personal income/spending, University of Michigan sentiment on Friday

These are some of the main moves in markets:

Stocks

• The S&P 500 rose 0.6% as of 4 p.m. New York time
• The Nasdaq 100 rose 0.6%
• The Dow Jones Industrial Average rose 1%
• The MSCI World index rose 0.5%

Currencies

• The Bloomberg Dollar Spot Index fell 0.2%
• The euro was little changed at $1.1934
• The British pound fell 0.2% to $1.3933
• The Japanese yen was little changed at 110.85 per dollar

Bonds

• The yield on 10-year Treasuries was little changed at 1.49%
• Germany’s 10-year yield declined one basis point to -0.19%
• Britain’s 10-year yield declined four basis points to 0.74%

Commodities

• West Texas Intermediate crude rose 0.3% to $73.30 a barrel
• Gold futures fell 0.5% to $1,774 an ounce

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