Dow, S&P 500 end the week with record highs with technology reducing losses and cyclicals shining by Investing.com

By Yasin Ebrahim

Investing.com – The Dow Jones Index hit record highs on Friday, with technology reducing some losses to close above the day’s lows, even as American rates rose to pre-pandemic levels, while the reflux trade continued to boost cyclical actions.

The value rose 0.90%, or 293 points, to end at a closing record of 32,778.64, and rose 0.10% to 3,943.34 and fell 0.59%, but had fallen by about 2%.

The increase jumped to 13-month highs of 1.642%, with bets on a faster pace of inflation, as the economy is expected to stage a stronger recovery thanks to another round of stimuli.

“The continuation of massive financing will lead to increasing inflationary implications in the long run, as the economy – eventually – tries to grow organic legs,” said Stifel in a note. The rise in inflation during the summer months will turn out to be modest, reinforcing the “indifferent approach of the Fed towards raising inflation expectations or a backup in rates,” he added.

The technology closed in the red, but well below its session lows, despite rising rates that tend to sour outlook for long-term growth companies that have not yet generated positive cash flows.

Facebook (NASDAQ :), Apple (NASDAQ :), Amazon.com (NASDAQ :), Netflix (NASDAQ 🙂 and Google-parent Alphabet (NASDAQ 🙂 were in the red.

Sentiment at Apple was also hampered by signs of weak demand from the iPhone. IPhone shipments in February fell 14%, according to Morgan Stanley (NYSE :), citing data from the China Academy of Information and Communications Technology. “This is consistent with our view that increased replacement cycles are likely to cause increasingly low spikes in demand in the iPhone redesign years,” said Morgan Stanley.

Chinese technology stocks fell 4% in the Alibaba (NYSE 🙂 on fears of a regulatory crackdown on technology. The Wall Street Journal reported that China’s antitrust regulators are weighing a record fine for the e-commerce giant.

Cyclicals, which move together with the economy, continued to take advantage of the wave of economic optimism, led by financial and industrial gains, with the latter driven by Boeing (NYSE 🙂 and Caterpillar (NYSE :).

Boeing received an order for 24 737 Max 7 jets from the private equity firm 8888 partners, which has a stake in Canadian airline Flair Airlines.

Some on Wall Street suggest that cycles will continue in favor as long as rates continue to rise. “The short term is likely to outweigh the long term if interest rates rise towards the goals of rate strategists in 2Q 2021, said Goldman Sachs (NYSE :), forecasting an additional increase of 25 basis points to the yield of 10 years of the US Treasury in 2Q 2021.

In other news, AMC Entertainment (NYSE 🙂 was up 9% after LA County said Los Angeles would reduce Covid-19’s restrictions to the second tier of California’s reopening system, paving the way for the reopening of theaters.