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S&P 500, Dow extend recovery after strong U.S. business surveys

(Reuters) – The S&P 500 and the Dow rose on Friday, extending a recovery from the previous session, as strong U.S. factory and services activity surveys lifted the mood at the end of a volatile week of trading.

FILE PHOTO: People are seen on Wall St. outside the New York Stock Exchange (NYSE) in New York City, U.S., March 19, 2021. REUTERS/Brendan McDermid

Helping the Dow outperform was Boeing, which added about 3% as industry sources said the planemaker has drawn up preliminary plans for a fresh sprint in 737 MAX output to as many as 42 jets a month in fall 2022.

IHS Markit’s data showed U.S. business activity picked up in May amid strong domestic demand, but backlogs of uncompleted work are piling up as manufacturers struggle to find raw materials and labor.

Wall Street’s main indexes gained ground on Thursday following a three-day slump after data showed the fewest U.S. weekly jobless claims since the pandemic-driven recession in 2020, pointing to a pick up in labor market.

Despite weakness on Friday, the Nasdaq is on course to snap a four-week losing streak as investors this week returned to tech-related mega-cap shares, which recently took the biggest hit on inflation worries.

“The inflation fears are overblown and it’s not that bad as the market has been pricing in and the one indicator that we can see are signs of moderation in commodities,” said Thomas Hayes, chairman and managing member at hedge fund Great Hill Capital LLC.

“Institutional investors took a lot of money out due to inflation fears but that money will start flowing into tech stocks as those fears moderate.”

Bitcoin dropped after China’s Vice Premier Liu He said his government will crack down on the virtual currency’s mining and trading activities. Cryptocurrency-related stocks Coinbase Global, Riot Blockchain and Marathon Digital Holdings erased early gains to fall between 2.6% and 4.7%.

Every major S&P sector was higher, with economy-linked financials and energy providing the biggest boost.

At 11:42 a.m. ET, the Dow Jones Industrial Average was up 252.30 points, or 0.74%, at 34,336.45 and the S&P 500 was up 12.80 points, or 0.31%, at 4,171.92. The Nasdaq Composite was down 20.33 points, or 0.15%, at 13,515.41.

Deere & Co gained 2.9% after the farm equipment manufacturer raised its full-year profit forecast.

Nvidia Corp added about 2.3% after announcing a four-for-one stock split, as it looks to make its stock less expensive for investors.

VF Corp slumped 7.3% after Vans and North Face parent’s quarterly profit fell short of estimates.

Advancing issues outnumbered decliners by a 2.20-to-1 ratio on the NYSE and by a 1.57-to-1 ratio on the Nasdaq.

The S&P index recorded 24 new 52-week highs and no new low, while the Nasdaq recorded 97 new highs and 13 new lows.

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