Last week, investors traded the safety and low yields of government bonds for the promise of gains from stocks that will rise with the economy, particularly those of companies in the energy and financial industries.
The Russell 2000 small-company index gained 48.3 points, about 2.2 percent, to close the week at 2,266.69. In contrast, U.S. government bond prices fell, pushing yields to their highest points in weeks.
For the week, the Dow eked out a 0.1-percent gain, with the NASDAQ retreating 1.6 percent and the S&P 500 shrinking by 0.7 percent.
Business activity is steadily improving in both services and manufacturing, according to new government data. U.S. consumers used their recent stimulus checks to drive retail sales to their largest gains in seven months, a 17 February report by the U.S. Commerce Department said.
Consumer spending could surpass expectations for the rest of the year with more federal stimulus spending driving an economic rebound, analysts at JPMorgan Chase wrote in a research note.
TREND FORECAST: As bond yields keep rising and with equities trading at near record-high P/E ratios and primed for a pullback, there will be more money flowing out of stock markets and into bonds.
