Wall Street reaps weekly gains amid Biden's infrastructure announcement, economic data

NEW YORK, April 2 (Xinhua) -- U.S. equities advanced in the week featuring an eagerly-anticipated infrastructure speech and a slew of key economic data.

For the holiday-shortened trading week, the Dow rose 0.2 percent, the S&P 500 climbed 1.1 percent, and the Nasdaq Composite advanced 2.6 percent. U.S. stock exchanges were closed on Friday in observance of Good Friday.

The S&P U.S. Listed China 50 index, which is designed to track the performance of the 50 largest Chinese companies listed on U.S. exchanges by total market cap, logged a weekly rise of 4.4 percent.

U.S. President Joe Biden on Wednesday unveiled a 2-trillion-U.S.-dollar infrastructure plan, touting it as a "once-in-a-generation" investment in America and proposing a corporate tax hike to offset the cost.

The plan, widely welcomed by Democrats, is expected to face a tough fight in Congress, as Republicans have flatly rejected any increase in taxes. Meanwhile, concerns over mounting debt and inflationary risks are expected to further complicate the plan's prospects.

The proposal, dubbed the American Jobs Plan, includes 621 billion dollars to improve transportation infrastructure, such as roads, bridges and airports, with 174 billion dollars allocated to electric vehicles.

The plan also sees 300 billion dollars earmarked to revitalize American manufacturers and small businesses, 213 billion for housing, 180 billion to boost the country's research and development, 100 billion in high-speed broadband, and 100 billion to modernize schools and early learning facilities.

To offset the plan's massive costs, Biden proposed increasing the corporate income tax rate to 28 percent, up from the current 21 percent, attempting to partially reverse the tax cuts under the Donald Trump administration.

"The spending will undoubtedly provide an additional boost to the economy, while the tax hikes on corporations will present a drag," Kevin Matras, executive vice president at Zacks Investment Research, said in a note on Thursday.

A batch of economic data released this week indicated that the U.S. economy is gaining momentum.

The U.S. manufacturing sector saw robust growth in March, marking the highest reading since December 1983, the Institute for Supply Management (ISM) reported Thursday.

The ISM Manufacturing Purchasing Managers' Index (PMI) stood at 64.7 percent, up 3.9 percentage points from the February reading. Any reading above 50 percent indicates the sector is generally expanding.

Initial jobless claims in the United States rose to 719,000 last week, after dropping to the lowest level since the COVID-19 pandemic, the Labor Department reported on Thursday.

In the week ending March 27, the number of Americans filing for unemployment benefits increased by 61,000 from the previous week's downwardly revised level of 658,000.

Meanwhile, the highly-anticipated monthly jobs report released Friday by the Labor Department showed that U.S. employers added 916,000 jobs in March, with the unemployment rate edging down to 6.0 percent. Economists surveyed by Dow Jones Newswires and The Wall Street Journal had looked for payrolls to rise by 675,000.

Looking ahead, analysts said volatility is likely on the equities market amid multiple tailwinds and headwinds.

"Over the next few months we expect the U.S. economy to make significant gains as the vaccine campaign gains momentum, the labor market continues to heal at a faster pace, and earnings revisions are revised higher," Quincy Krosby, chief market strategist at Prudential Financial, told Xinhua earlier this week.

"Still, there will be bouts of volatility," amid concerns about inflationary pressures and corporate tax hikes, and uncertainty over the pandemic, she said.

The markets "could maybe move 5 percent higher maximum and the downside could be 20 percent lower until the end of the summer," Larry Benedict, CEO and founder of The Opportunistic Trader, a U.S. market research firm, told Xinhua.