Dow rises nearly 100 points to close at a record amid solid earnings

U.S. stocks rebounded on Wednesday as strong earnings results and economic optimism pushed the Dow Jones Industrial Average to a record high.

The blue-chip Dow gained 97.31 points, or 0.3%, to 34,230.34, hitting a record closing high. The S&P 500 rose 0.1% to 4,167.59. The Nasdaq Composite fell 0.4% to 13,582.42, however, as Amazon, Netflix and Facebook all dipped more than 1%.

General Motors shares climbed over 4% after earnings blew past expectations. Activision Blizzard traded higher by 3% after strong results.

Commodity stocks jumped with the Energy Select Sector SPDR and the Materials Select Sector SPDR notching the biggest gains among sectors. Chevron and Dow were the two biggest gainers in the Dow Jones Industrial Average. ConocoPhillips popped more than 5% thanks in part to an upgrade to buy from Bank of America.

On the data front, private payrolls rose by 742,000 jobs in April, according to a Wednesday report from ADP. This result was below expectations of 800,000 jobs from economists surveyed by Dow Jones. ADP did revise its March report upward by 48,000 jobs.

Meanwhile, the IHS Markit U.S. services purchasing managers index came in at 64.7 for April, ahead of the projected reading of 63.3, according to economists surveyed by Dow Jones. The ISM non-manufacturing index came in slightly under expectations at 62.7, however. PMIs are calculated such that readings above 50 represent expansion in an economic sector.

Oil prices rose initially, with futures for the U.S. benchmark West Texas Intermediate topping $66 per barrel, after data from the American Petroleum Institute showed a sharp drawdown in U.S. oil inventory. U.S. West Texas Intermediate (WTI) crude settled 6 cents, or 0.09%, lower at $65.63 per barrel.

Still, the recent surge in commodities prices, including lumber and corn, is increasing inflation expectations and making cyclical stocks more attractive, said Andrew Smith, the chief investment strategist at Delos Capital Advisors in Dallas.

“We’ve seen inflation beneficiaries shoot through the roof … That’s going to lead real rates higher and that’s going to be the source for those cyclical trades to continue to work,” Smith said.

The Biden administration announced Wednesday that it supports waiving intellectual patent protections for Covid-19 vaccines, as countries struggle to manufacture the life-saving doses.

Stocks of major pharmaceutical companies that have produced vaccines fell following the news. Moderna dropped more than 6%.

Exercise equipment maker Peloton dropped more than 14% after announcing a recall of its treadmill product due to safety concerns.