An increasing optimistic outlook for the US economy led investors to dump government bonds on Friday and stack up in economically sensitive sectors of the stock market.
The S&P 500 showed 0.2% higher. The Nasdaq Composite added 0.4%. The Dow Jones Industrial Average added about 88 points, or 0.3%.
On bond markets, yields on the 10-year treasury note rose to 1,335%, from 1,286% on Thursday.
The increase in equities and bond yields is due to fresh economic data, the enthusiasm for the US recovery. On Friday, new data showed that operating activity in the U.S. private sector continued, complemented by accelerated service activity and manufacturing production. This follows a report on Wednesday showing that consumers are using stimulus tests to increase retail spending in January to the largest increase in seven months. Some economists increased gross domestic product for the first quarter of the year.
JPMorgan Chase & Co. ‘s strategists said Friday they expect consumers to shatter expectations for the rest of the year, given the expected fiscal stimulus and economic reopening as the pandemic eases. Meanwhile, the president of the Federal Reserve Bank of Boston, Eric Rosengren, said he expects the economy to pick up steam this year as the vaccines are distributed.