By Stephen Culp
NEW YORK (Reuters) – The S&P 500 and the Dow were on track to notch new all-time closing highs on Monday as surprisingly robust economic data stoked investor risk appetite, while cryptocurrency market cap breached the $2 trillion hurdle.
Friday's employment report, which showed 916,000 jobs added in March and the unemployment rate falling to 6%, driven by vaccine deployment and stimulus, marked the beginning of what could be the strongest yearly economic performance in decades.
"Today's action was set by Friday's employment report," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.
Enthusiasm over the jobs report was boosted on Monday by the Institute for Supply Management's non-manufacturing PMI reading hit an all-time high, showing the pandemic-battered services sector expanded at a record pace in March, and providing further evidence that the economic recovery was gaining momentum.
Still, economically sensitive cyclicals and small caps are lagging.
"Its been a strange market over the past week or so," Nolte added. "With better economic data you'd expect economically sensitive stocks would be outperforming."
The rising stimulus tide is lifting all boats, Nolte suggests.
"If you look at recent history, we've had everything rally because of the flow of money come into financial markets," he said.
The Dow Jones Industrial Average rose 394.12 points, or 1.19%, to 33,547.33, the S&P 500 gained 60.12 points, or 1.50%, to 4,079.99 and the Nasdaq Composite added 235.25 points, or 1.75%, to 13,715.35.
The dollar dipped to a one-week low against a basket of currencies as U.S. stocks rallied and as investors waited on the next catalyst to drive direction.
Cryptocurrency demand continues to grow, with market cap hitting a record high of $2 trillion on Monday.
The dollar index fell 0.46%, with the euro up 0.42% to $1.1811.
The Japanese yen strengthened 0.51% versus the greenback at 110.17 per dollar, while Sterling was last trading at $1.3903, up 0.54% on the day.
European and Australian stock markets were closed in observance of Easter Monday, while China's stock market was dark in observance of Tomb Sweeping day.
MSCI's gauge of stocks across the globe gained 1.01%.
Emerging market stocks rose 0.07%. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.04% higher, while Japan's Nikkei rose 0.79%.
U.S. Treasury yields oscillated in choppy trading, and were last off session highs reached in reaction to Friday's blockbuster nonfarm payrolls report.
Benchmark 10-year notes last rose 3/32 in price to yield 1.7145%, from 1.72% late on Friday.
The 30-year bond last rose 1/32 in price to yield 2.3635%, from 2.37% late on Friday.
Oil prices fell as increasing OPEC+ supply and rising Iranian output offset hopes for a demand rebound driven by economic revival.
U.S. crude settled at $58.65 per barrel, down 4.6% on the day, while Brent shed 4.18% to end at $62.15 per barrel.
Gold prices edged lower as the safe-haven metal's luster was dimmed by rising global equity prices.
Spot gold dropped 0.1% to $1,726.67 an ounce. U.S. gold futures settled little changed at $1,728.80.
(Reporting by Stephen Culp; Editing by Marguerita Choy)