U.S. stocks closed sharply higher Thursday, with the S&P 500 index hitting an all-time high, snapping three straight days of losses. All 10 sectors in the S&P 500 rallied Thursday, led by gains in the technology sector.
Notable companies reporting after the closing bell Thursday include retailer Party City Holdco Inc., gaming company King Digital Entertainment PLC, department store Nordstrom Inc., restaurant El Pollo LoCo Holdings Inc. and chip-equipment maker Applied Materials Inc.
The Dow (INDEXDJX:.DJI) leaped 191.75 points, or 1.06 percent, to close at 18,252. The Standard & Poor’s 500 index (INDEXNASDAQ:.IXIC) rose 22.62 points, or 1.08 percent, to end at 2,121.10. The Nasdaq composite (INDEXSP:.INX) gained 69.10 points, or 1.39 percent, to finish at 5,051.
Apple Inc. (NASDAQ:AAPL) was among the biggest gainers in the Dow Thursday, adding more than 2.2 percent to close at $128.82. Meanwhile, Microsoft Corporation (NASDAQ:MSFT), the world’s largest software company, also led the Dow higher, gaining 2.3 percent to end at $48.72.
Network equipment maker Cisco Systems Inc. (NASDAQ:CSCO) was the only decliner in the blue-chip index, losing 1 percent despite posting strong quarterly earnings that topped Wall Street estimates a day earlier.
With the S&P 500 reaching a record high, experts say the market is positioned to continue to move higher, says Keith Bliss, senior vice president and director of sales and marketing at Cuttone & Co. Inc. “From a quantitative standpoint, we don’t see the market overbought and would not until the S&P 500 reaches the 2155-2160 level,” Bliss said.
The current rally in the market is driven mostly by interest rates, Bliss explained. The U.S. Federal Reserve kept interest rates at historic lows last month following the release of a disappointing gross domestic product report that revealed the U.S. economy grew slower than expected in the first quarter. The move suggests the central bank will likely wait to raise rates until after its June meeting.
“Since May 6, interest rates and the equity market have been inversely correlated more than they have for the last three months. As we move through 2015, and we get closer to a perceived rate hike, expect this inverse relationship to tighten further,” Bliss said, meaning the rally should continue to play out in the middle of June.
Shares of Avon Products Inc. (NYSE:AVP) saw its shares close up 6 percent Thursday to $7.07, after spiking as much as 20 percent in afternoon trading after private equity investment firm PTG Capital Partners Ltd. announced a takeover bid. However, Avon announced Thursday afternoon it has not received any offer or other communications from such an entity and has not been able to confirm that such an entity exists.
Shares of Kohl's Corporation (NYSE:KSS) tumbled 13 percent Thursday after the retailer’s same store sales, a key metric in the retail sector, rose 1.4 percent last quarter, below analysts’ forecasts of 2.6 percent.
Economists are looking ahead to Friday’s economic calendar, which includes the University of Michigan’s semimonthly Consumer Sentiment Index for May, to be released Friday at 10 a.m. EDT. Data last month revealed U.S. consumer sentiment jumped to its second-highest level since 2007 in April, as the consumer sentiment survey showed a final reading of 95.9 last month, up from 93 in March.