US markets close higher on recovery hopes

US stocks rose in a late-day rally on Thursday as investors bought stocks likely to do well in the recovery, while picking up beaten-down Apple and Tesla shares, in anticipation that the US economy grows at its fastest pace in decades this year.

President Biden cited as economic progress Labor Department data that showed a declining number of Americans claimed unemployment insurance, news investors shrugged off earlier as Wall Street traded lower most of the session.

The labour report on Thursday showed claims for unemployment benefits dropped to a one-year low last week, a sign that the US economy is on the verge of stronger growth as the public health situation improves and temperatures rise.

An end-of-quarter rebalancing of investment portfolios by institutional investors added to another mostly seesaw session in which the major Wall Street indexes rose and fell amid the ongoing rotation from growth into so-called value stocks.

“It’s a very confused stock market, there isn’t real leadership,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

“One day cyclicals are in favour, the next day it’s tech-plus is in favour,” he said. “But on the positive side, there isn’t what I call aggressive selling.”

The Dow Jones Industrial Average rose 0.6 percent to 32,619, the S&P 500 gained 0.5 percent to 3,909 and the Nasdaq Composite added 0.1 percent to 12,977.

The Nasdaq Composite has fallen in March after four straight months of gains as rosy economic projections lifted demand for undervalued cyclical stocks, but also raised fears of higher inflation as seen in the jump in 10-year Treasury yields.

Shares of Nike fell as the sporting goods giant faced a Chinese social media backlash over its comments about reports of forced labour in Xinjiang. (Reuters)