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Dow and S&P 500 Close at Records as Economic Picture Improves

The Dow and S&P 500 finish Monday trading at records after hiring in the U.S. surges in March.

The Dow Jones Industrial Average and the S&P 500 closed at records on Monday after U.S. employers added the most workers to payrolls in seven months and other data offered evidence that the economy was improving.

The Dow closed 374 points, or 1.13%, higher at 33,527, the S&P 500 added 1.44% to 4,077 and the Nasdaq jumped 1.67% to 13,705.

The Dow and S&P 500 also set record intraday highs.

The U.S. economy added far more new jobs than expected in March. Hiring began to return to its prepandemic pace amid as vaccines rolled out faster and more states reopened.

The Labor Department said 916,000 new jobs were created last month, well above forecasts of about 675,000. The unemployment rate fell to 6%.

Meanwhile, the services side of the U.S. economy saw the fastest growth on record as businesses reopened and the vaccine rollout accelerated. 

The Institute for Supply Management said a survey of U.S. service providers jumped to 63.7 in March from 55.3 in February.

"We’re kicking the first full trading week of April off with a bang after the S&P hit the 4,000 milestone last week. And the stellar jobs numbers seem to be fueling the bullish fire (Monday)," said Chris Larkin, managing director of trading and investing product at E-Trade.

"While moves in the 10-year caused some market jitters over the past few months, the overall bullish trend remains firmly in place, and the VIX, or fear index, is the lowest it’s been in over a year,"  he added. "Vaccinations are rolling out at a record clip, and historic stimulus efforts from Congress have all paved the way for continued positive market momentum." 

With the economy rolling into a full-fledged hiring boom this spring, and consumers fueled by the recent $1.9 trillion COVID relief bill, fixed-income markets increasingly have been growing concerned over the near-term chances of faster inflation.

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The Fed has pledged to keep interest rates near zero through 2023. But continued strong employment growth has many questioning whether the Fed can maintain that stance.

The yield on the benchmark 10-year Treasury fell Monday to 1.716%.

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The S&P 500 jumped 1.18% on Thursday to almost 4,020, establishing a closing high and crossing 4,000 for the first time after President Joe Biden unveiled a $2.25 trillion infrastructure spending plan. Stock markets in the U.S. were closed for Good Friday.

Treasury Secretary Janet Yellen on Monday called for a global minimum corporate tax rate in prepared remarks ahead of meetings with the International Monetary Fund and World Bank. She'll also be pushing the message behind Biden's infrastructure plan.

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Oil prices in the U.S. settled down 4.6% to $58.65 a barrel after OPEC+ leaders decided to gradually boost crude production from May through July. 

Wedbush analysts upgraded shares of Tesla  (TSLA) - Get Tesla Inc. Report to outperform and boosted the stock's price target to $1,000 from $950. The move came after the electric-vehicle maker reported stronger-than-expected deliveries for the first quarter, paced by its midpriced Model 3 sedan and Chinese demand for its new Model Y.

"In our opinion the 1Q delivery numbers released on Friday" were "a paradigm changer and show that the pent-up demand globally for Tesla's Model 3/Y is hitting its next stage of growth as part of a global green tidal wave underway," wrote analysts Dan Ives and Strecker Backe in a research note.

The stock finished 4.4% higher at $691.05.