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S&P500 rallies to record as economic sectors rebound

NEW YORK: US stocks rallied on Friday and the S&P 500 hit a record high as financials and other economically focused sectors rebounded after a selloff sparked by growth worries earlier in the week.

The indexes were also set to end higher on a week that also saw a sharp rally in US Treasuries amid the fears that the recovery in the US economy was losing steam with the Delta variant of the coronavirus spreading.

S&P financials led sector gains, followed by materials.

Investors are eager to hear from US companies next week when the second-quarter earnings season begins. Big banks will be among the first to report.

Analysts expect earnings growth of 65.8% for companies in the S&P 500 index in the quarter, up from a previous forecast of 54% growth at the start of the period, according to Refinitiv IBES data.

“Earnings are likely to be good because earnings were so weak from a year ago at this time,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.

The Dow Jones Industrial Average rose 454.61 points, or 1.32%, to 34,876.54, the S&P 500 gained 47.99 points, or 1.11%, to 4,368.81 and the Nasdaq Composite added 136.00 points, or 0.93%, to 14,695.79.

Among individual stocks, Levi Strauss & Co added 1.3% as it forecast a strong full-year profit after beating quarterly earnings estimates on improving demand across its markets for jeans, tops, and jackets.

US-listed shares of Chinese ride-hailing company Didi Global Inc rose 8.8% after four sessions of losses, as it was recently hit by an investigation from China’s internet watchdog.

Advancing issues outnumbered declining ones on the NYSE by a 4.08-to-1 ratio; on Nasdaq, a 3.09-to-1 ratio favored advancers.

The S&P 500 posted 35 new 52-week highs and no new lows; the Nasdaq Composite recorded 53 new highs and 30 new lows.

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