April 2019 Market Recap
Stocks rallied for a fourth consecutive month in April, marking the best start to a year since 1987 for the S&P 500. The index climbed 3.9%, while the Nasdaq Composite jumped 4.9% as each benchmark vaulted to record highs for the first time in more than six months. The Dow Jones Industrial Average underperformed its peers for a second straight month, advancing 2.6% as softer-than-anticipated quarterly profit tallies from key component companies weighed on the 30-stock index. However, first-quarter earnings results were overall "better than feared." Strong results from the big banks helped the Financials sector pace the advance with an 8.8% rise in April. The Communications Services sector also outperformed, jumping 6.2%, as double-digit gains from media and entertainment giants boosted the group higher. Health Care stocks missed out on gains, falling 2.7% as headwinds from regulatory scrutiny outweighed strong corporate results from industry bellwethers. Robust economic releases helped buoy the U.S. dollar to a 23-month high against a basket of its peers, while tepid inflation updates fostered a return of the so-called "Goldilocks" environment. The Labor Department's March jobs report showed non-farm payrolls increased 196,000, a sharp rebound from February's disappointing 20,000 gain. Another report showed the U.S. economy grew at a 3.2% clip in the first-quarter, well above expectations of a 2.3% increase and the best January-March performance since 2014. Separate reports on U.S. inflation, however, showed consumer prices rose at the slowest pace since 2018 in March. This reaffirmed the Federal Reserve expectations of no rate hikes in 2019. Amid the economic data, Treasuries weakened in April, with the yield on the 10-year note ending 10 basis points higher at 2.50%.