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Investing.com – The S&P 500 and Dow closed at record highs Monday as tech and reopening stocks surged on signs the red-hot economic recovery is set to continue ahead of quarterly earnings season.
The S&P 500 rose 1.41% to end the day at a closing high of 4,076.72, the Dow Jones Industrial Average rose 1.13%, or 373 points, to close at an all-time high of 33,527.19, the Nasdaq Composite was up 1.67%.
ISM nonmanufacturing data for March jumped to a reading of 63.7, beating expectations of 59. This represents the highest reading for the service sector index since 1997.
“The reopening of leisure & hospitality hit a higher gear in March and evidence suggests that it will hit an even higher gear in April. The vaccine distribution process has been progressing well, and a more normal economy appears to be close at hand,” Jefferies (NYSE:JEF) said in a note.
The services sector is critical component of the U.S. economy, accounting for roughly 80% of U.S. private-sector gross domestic product (GDP).
The strong data on services come just days after the jobs report showed the U.S. created 916,000 in March, well above the 660,000 expected, with the unemployment rate falling to 6% from 6.2% previously.
The backdrop of positive data supports the reopening trade – bullish bets on stocks tied to the progress of the economic reopening – with airlines, cruise lines and casinos rising sharply.
United Airlines Holdings (NASDAQ:UAL), American Airlines Group (NASDAQ:NASDAQ:AAL), Carnival (NYSE:CCL) and Norwegian Cruise (NYSE:NCLH), and MGM Resorts (NYSE:MGM) ended higher.
Tech also played its role in the record-setting day on Wall Street, rising more than 1%, led by a revival of megacap tech ahead of the quarterly earnings season.
Microsoft (NASDAQ:MSFT), Google-parent Alphabet (NASDAQ:GOOGL), Facebook (NASDAQ:FB) hit record highs, and Amazon.com (NASDAQ:AMZN) and Apple (NASDAQ:AAPL) were up more than 2%.
Alphabet’s Google was boosted further by positive news confirming the search-engine giant had won a court ruling that declared it had not infringed Oracle (NYSE:ORCL)’s Java software. In a separate announcement, Google said it will stop using Oracle’s finance software and instead use financial software from SAP SE ADR (NYSE:SAP).
In consumer discretionary stocks, Tesla (NASDAQ:TSLA) was one of the standout performers on the day, rising 5% after the electric vehicle maker reported record first-quarter deliveries.
Energy was the exception to the broader-market rally, pressured by a fall in oil prices after major oil producers agreed to ease production cuts.
Looking ahead to the start of the quarterly earnings season, Wall Street continues to back cyclicals as sectors of the economy to shine.
“We expect S&P 500 earnings to grow by 17.7% year-over-year for the first quarter of 2021,” Wells Fargo (NYSE:WFC) said. “Financials and Materials appear set to lead the rebound — we remain favorable on these sectors.”
In other news, Treasury Secretary Janet Yellen called for a global minimum corporate tax “to ensure that governments have stable tax systems that raise sufficient revenue to invest in public goods and respond to crises.” The push for the tax measure comes ahead of a virtual meeting with global counterparts and in the midst of Biden’s $2.3 trillion infrastructure proposal.
