The blue-chip index Dow Jones Industrial Average reached historical high on Thursday, moving across the threshold of 27,000 points. The benchmark ended the trading session with a gain of 227.88 points, or 0.85%, to 27,088.08 points. Dow Jones, which tracks the shares of the 30 largest US public companies, managed to conquer the 27,000-point mark for the first time in its history. The indicator managed to reach the threshold of 26,000 in January 2018 and in just over a year and a half added 1,000 points to its value.
The broader index S&P 500 rose by 0.08% to 2.999.91 points, after yesterday briefly crossed the threshold of 3,000 points. However, the technology Nasdaq Composite ended the trading session with a decline of 6.5 points, to 0.08%, to 8,189.07 points.
The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 0.77% to 12.93.
Earlier it was reported that the number of US jobless claims fell to a 12-week low, which supports the Federal Reserve’s view that a stable labor market is at the heart of economic growth. Unemployment claims dropped to 209,000 in the week ending July 6, which includes the July 4 holiday. The figures are below all estimates of the analysts. The four-week moving average, which is considered a better measure for the labor market due to the exclusion of volatility from week to week, fell from 222.5 thousand to 219.25 thousand last week.
Investors’ moods were also influenced by the comment of the US Federal Reserve Governor Jerome Powell, who said on Wednesday that the risks to the US economy are still visible in the background of lowering business investment due to trade strain and the remaining weaker inflation. With this, the Central Bank Governor sends a signal that this month may have a fall in interest rates.
Traders confirmed their expectations for a cut in interest rates by 25 basis points this month by increasing projections for three similar declines by the end of 2019.
On bond markets, yields on 10-year and 30-year US Treasuries increased to 2.131% and 2.65%, respectively.
Corporate stocks performance
The blue-chip component stocks of UnitedHealth Group, led the Dow Jones index higher, closing up by 5.5%.
Shares of Delta Air Lines rose by 1.16% after the earnings growth beat analysts projections.
The spike in bond yields helped drive bank stocks higher. When bond yields rise, they push up interest rates on mortgages and other loans, making them more profitable for lenders. Bank of America rose by 1.5% and Goldman Sachs gained 2.5%.
The pharmaceutical and healthcare sector was the worst performer during the trading session. The stocks of Merck & Company declined by 4.53%, while Pfizer Inc dropped by 2.5% and Johnson & Johnson was down by 0.73%.
The stocks of Bed Bath and Beyond declined by 3% after the company reported large losses due to impairment charges for a second consecutive quarter Wednesday evening, though it beat analyst estimates for earnings when adjusting for those costs.
Shares of Weight Watchers International rose by 8.38%, after J.P. Morgan analyst Christina Brathwaite said she was no longer bearish on the weight management and wellness company, citing her belief that subscriber trends have stabilized.
The top performers on the S&P 500 were Cigna Corp (+9.24%), Anthem Inc (+5.58%) and UnitedHealth Group Incorporated (+5.54%), while on the flipside were Iron Mountain Incorporated (-7.50%), Range Resources Corp (-4.75%) and Merck & Company Inc (-4.53%).
Corporate earnings reports
Delta Air Lines raised its profit forecast for the year as travel demand continues to climb, particularly for its premium-class cabins. The airline’s revenue was 12.5 billion USD in the three months through June, a nearly 9% year-over-year increase and in line with investor expectations. Meanwhile, profits rose 32% to 2.35 USD per share, higher than Wall Street predicted. As a result of the strong earnings report, Delta raised its full-year profit outlook to as high as 7.25 USD per share.