Tech sector and mega-caps driving the market higher
The S&P 500 is up 0.4% and is trading at fresh all-time highs on the back of continued strength in the mega-caps and large growth stocks. The Nasdaq Composite, which is more exposed to these stocks, is up 0.9%, while the Dow Jones Industrial Average (unch) trades relatively unchanged. There are no specific news drivers today, suggesting that the mega-caps are drawing support from the retracement in long-term interest rates this month, rebalancing away from the cyclical stocks that are still up big this year, and perhaps some frontrunning for Q1 earnings. The information technology sector, which is the most heavily-weighted sector in the S&P 500, stands atop the leaderboard with a 1.1% gain. The Vanguard Mega Cap Growth ETF (MGK 217.56, +1.98) is up 0.9% and trading at a record high. Conversely, the energy (-1.5%) and financials (-0.2%) sectors, which are this year's top performers, are lagging in negative territory. The communication services sector (-0.3%) also underperforms.Apple (AAPL 129.82, +1.93, +1.5%) is outperforming, even though the Nikkei reported that the company is delaying MacBook and iPad production due to the global semiconductor shortage. General Motors (GM 60.26, -0.58, -1.0%) trades lower amid news that it's cutting production in several North American factories due to the chip shortage. In other corporate news, Visa (V 220.32, +1.05, +0.5%) is being investigated by the Department of Justice over its incentives to certain banks, according to Bloomberg, and Constellation Brands (STZ 226.34, -8.60, -3.6%) guided FY22 EPS below consensus. Separately, Fed Chair Powell rehashed the Fed's view to keep monetary policy accommodative since the economic recovery is still uneven and incomplete. Mr. Powell is currently speaking about the global economy at an event hosted by the IMF. Reviewing today's economic data:Initial claims for the week ending April 3 increased 16,000 to 744,000 (Briefing.com consensus 678,000). Continuing claims for the week ending March 27 decreased 16,000 to 3.734 million.The key takeaway from the report is that it is disappointing labor market data that will convince the Fed that it needs to be patient before removing policy accommodation.