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* Growth stocks will outperform value for the second week
* Honeywell wins as brokers raise price targets
* March PPI above expectations
* Dow up 0.89%, S&P 500 up 0.77%, Nasdaq up 0.51% (new everywhere, weekly earnings, market width, volume)
April 9 (Reuters) – The S&P 500 and the Dow rallied Friday, closing at record highs, posting a third consecutive weekly rise, in part thanks to a rise in growth stocks, with a late-day rally building gains leading up to the quarterly earnings season following week.
Growth names have found their foundation in the past two weeks after outperforming value stocks for most of the year. A drop in 10-year US Treasury yields after a 14-month high hit in late March encouraged buying growth.
Data showed that US producer prices rose more than expected in March, yielding the largest annual gain in 9-1 / 2 years.
Many investors now expect higher inflation as vaccine rollouts help the US economy recover from lockdowns, but stocks showed little concern as the Federal Reserve has insisted inflation will exceed its target.
“This is why (Powell) was jawing all week, making sure everyone understood that they were expecting a peak and that they were ready for it, it was no surprise,” said Ken Polcari, managing partner at Kace Capital Advisors in Jupiter. , Florida.
“That’s why the market hasn’t flinched because it managed to quell the fear and keep people from really freaking out.”
The Dow Jones Industrial Average rose 297.03 points or 0.89% to 33,800.6, the S&P 500 gained 31.63 points or 0.77% to 4,128.8 and the Nasdaq Composite 70.88 points, or 0. 51%, up to 13,900.19.
The S&P was up 2.71% this week, the Dow was up 1.96% and the Nasdaq was up 3.12%.
Banks will start their first-quarter earnings season next week, while Goldman Sachs, JPMorgan and Wells Fargo report on Wednesday. Analysts expect earnings for S&P 500 companies to show a 25% jump from a year earlier, according to data from Refinitiv IBES. That would be the strongest performance in the quarter since 2018.
Megacap names such as Apple, Amazon and Microsoft, which are in the growth index, moved up to match the S&P 500. Amazon shares rose 2.21% as warehouse workers in Alabama rejected an attempt to form a union.
The Russell 1000 growth index, which is largely made up of technology stocks, outperformed its value counterpart, which mainly consisted of cyclical stocks such as financials and energy names, for a second week following the drop in long-term government bond yields.
Bank of America’s weekly cash flow figures showed that investors have pumped more money into stocks in the past five months than in the past 12 years.
A 3.24% gain in Honeywell helped lift the Dow as Jefferies and JP Morgan raised their target price on the US aircraft parts manufacturer’s stock.
The volume on the US stock exchanges was 8.69 billion shares, compared to the average of 11.71 billion for the full session over the past 20 trading days. (Reporting by Chuck Mikolajczak; Editing by David Gregorio)