Stocks rally to new highs, sparked by fresh China stimulus

The Dow, S&P 500 and Nasdaq Composite all closed at all-time highs after the People’s Bank of China injected fresh liquidity into the country’s banking system, adding to the optimism from easing trade tensions and an improving global outlook that supported broad gains last month.

“The PBOC delivered another round of stimulus in what is likely to be the beginning of a new trend in efforts of delivering better than 6% economic growth in China this year,” said Oanda’s Edward Moya.

Information technology (+1.9%) and industrials (+1.9%) topped today’s S&P sector standings, followed by communication services (+1.3%) and consumer discretionary (+1.3%).

Semiconductor stocks extended last year’s strong gains, with Advanced Micro Devices +7.1%, Taiwan Semiconductor +3.3%, Micron Technology +3%. KLA +2.5% and Intel +1.6%.

Apple turned in another strong showing, closing 2.3% higher and hitting $300/share for the first time, while Amazon (+2.7%), Alphabet (+2.3%) and Facebook (+2.2%) all climbed more than 2%.

On the flip side, the utilities (-1.4%), real estate (-1.3%), materials (-1.2%) and consumer staples (-0.8%) sectors slipped into the red.

Longer-dated U.S. Treasurys enjoyed some buying interest, as the 10-year yield dropped 4 bps to 1.88% while the two-year yield remained flat at 1.57%.

WTI February crude oil tacked on 0.2% to $61.18/bbl.