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Stock Market News for May 28, 2021

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U.S. stocks closed higher on Thursday as investors shifted focus toward stocks that are likely to benefit as the economy reopens. Also, another set of strong economic data helped boost the confidence of investors, thus confirming that the economic recovery is on track. The Dow and the S&P 500 ended in positive territory, while the Nasdaq finished in the red.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) rose 0.41% or 141.59 points to close at 34,464.64.

The S&P 500 climbed 0.12% or 4.89 points to finish at 4,200.88 points, with financial and industrial stocks rallying on hopes of a faster economic recovery.

The Financials Select Sector SPDR (XLF) and the Industrials Select Sector SPDR (XLI) rallied 1.2% and 1.4%, respectively. Six of the 11 sectors of the benchmark index closed in positive territory. Shares of The Boeing Company (BA - Free Report) jumped 3.9%. Boeing has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank stocks here.

The tech-heavy Nasdaq fell 0.01% or 1.72 points to end at 13,736.28 points.

The fear-gauge CBOE Volatility Index (VIX) was down 3.57% to 16.74. A total of 12.48 billion shares were traded on Thursday, higher than the last 20-session average of 10.52 billion. Advancers outnumbered decliners on the NYSE by a 1.85-to-1 ratio. On Nasdaq, a 1.95-to-1 ratio favored advancing issues.

Investors Shift Focus

Stocks haven’t been making much movement and staying in a holding pattern for the past few sessions as investors’ worries over rising inflation aren’t completely over. They have been keeping a close watch on how the Fed handles its policies and around when it plans to start pulling back on bond purchases. Markets will be closed Monday for the Memorial Day holiday.

Moreover, investors are also waiting for the release of the personal consumption expenditure index, the Fed measure of inflation. This sentiment persisted till Thursday, with stocks making marginal gains.

At the same time, strong-than-expected labor market data, somewhat lifted investors’ sentiment as they now feel more confident about a faster economic recovery. This saw investors shifting focus from the high-growth technology stocks toward cyclical stocks.

Economic Data

Strong labor market data bolstered investors’ confidence in the economy once again on Thursday. Initial jobless claims fell 38,000 to 406,000 for the week ended May 22, according to the U.S. Labor Department. This is the fourth straight week of decline in initial jobless claims.

In a separate report, the Commerce Department said that the GDP grew at an annualized pace of 6.4% in the first quarter. Thursday’s figures remain unchanged from the initial estimates.

In other economic reports released on Thursday, durable goods orders declined 1.3% in April. However, core orders increased 1%.

Also, pending home sales declined 4.4% in April.

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