US open: Wall Street set to test record highs, pundits say

US stocks continued their push into the black for the year and the quarter ahead of Friday´s all important monthly jobs report, with some well-known pundits and strategists beginning to eye a return to record levels for some of the main stock market gauges.

As of 15:19BST, the Dow Jones Industrials was trading up by 27.38 points or 0.15% to 17,738.00 and the S&P 500 by another 3.14 points or 0.14% to stand at 2,066.96.

The benchmark S&P 500 was on track for a gain of approximately 1.0% over the first three months of the year but nearly 7.0% for March, after jumping back by about 13% from the 22-month lows reached at the start of February – led by a rebound in commodity and bank stocks.

Thursday´s advance came amid mixed economic reports, with MNI´s regional Chicago purchasing managers´ index recovering from a reading of 47.6 to 53.6 (consensus: 50.8).

In parallel, initial unemployment claims rose by 11,000 over the seven days ended on 16 March to reach 276,000 (consensus: 265,000).

Acting as a backdrop, some observers were beginning to eye the possibility that shares might be headed back to their record highs, thanks to a more 'dovish' policy stance from the US central bank.

“The implications are that stock market investors should guard against the risk of an upside surprise in the next few weeks. And, if last May´s top remains intac, it would be imply that the long rallythe Fed has helped to induce has finally run out of puff,” the FT´s John Authers wroteon Thursday.

Judging by market commentary, investors were also beginning to look out to the start of the next earnings season in the States, on 11 April, when Alcoa and JP Morgan were scheduled to next update their shareholders.

Wall Street´s largest banks, JP Morgan, Citigroup, Morgan Stanley, Bank of America-Merrill Lynch and Goldman Sachs were expected to report an average drop of 25.0% in their quarterly trading revenues, the FT pointed out.

Nonetheless, the sudden reversal in the stock market´s fortunes over the last few weeks meant that analysts´ estimates might prove to have been overly pessimistic.

A rally in global equities since their February 2016 lows had further to run, as evidence mounted that deflationary pressures were easing, in turn allowing the US Federal Reserve to continue tightening policy "without causing trauma", analysts at Kepler Chevreux said in a research note sent to clients on 30 March.

The yield on the benchmark 10-year US Treasury note was one basis point higher at 1.83%, but Bloomberg´s spot US dollar index was 0.42% weaker at 94.44.

Front month West Texas Intermediate crude oil futures were 1.04% higher to $38.72 on NYMEX.