Categories: TechWorld

Dow up over 350 points, stocks rebound after jobless claims data deemed ‘welcome news for the Fed’

U.S. stocks advanced on Thursday afternoon, erasing losses from earlier in the week during the second-to-last trading session of the year.

The main indexes built on premarket gains after U.S. weekly jobless claims data showed the number of workers receiving benefits has climbed to the highest level since February, a tentative sign that the Federal Reserve’s interest-rate hikes might be slowing economic growth and inflation.

Advertisement
How are stocks trading
  • The S&P 500 SPX, +1.77% rose 70 points, or 1.8%, to 3,853.
  • Dow Jones Industrial Average DJIA, +1.04% added 385 points, or 1.2%, to 33,256.
  • Nasdaq Composite COMP, +2.64% climbed 264 points, or 2.6%, to 10,477.

On Wednesday, the Nasdaq Composite dropped 1.4% to 10,213, its lowest closing level of the year. The S&P 500 is up more than 6% from its 2022 low from mid-October, but the large-cap index remains down more than 19% year-to-date, FactSet data show.

What’s driving markets

The penultimate session of 2022 was showing tentative signs of delivering some much needed festive cheer for the stock market as a hoped for “Santa Claus rally” has so far failed to materialize.

MarketWatch Live: Is that you, Santa Claus?

Advertisement

Stocks advanced on Wednesday as data showed the number of Americans receiving more than a single week of unemployment benefits had climbed by 41,000 last week to 1.71 million, the highest level in 10 months.

 

Advertisement

The jobless-claims data “points to a loosening in the labor market, which is welcome news for the Fed,” said Larry Adam, chief investment officer at Raymond James, in a tweet.

However, analysts at Citi still think the claims data indicates a still-very-tight labor markets compared to historical levels.

Advertisement

“While both initial and continuing claims increased this week, they remain within the levels of late 2019,” wrote Gisela Hoxha, U.S. economics research analyst of Citi. “Anecdotes of company layoffs have increased in recent months, particularly in the tech sector. While it could be hard to disentangle the seasonal effects from the announced layoffs, in our view there is no significant evidence of them showing up in the claims data yet.”

Some of those layoffs could be taking effect a couple months later as employees might be kept on payroll for some time after the announcement, which will be significant signs of weakness in the labor market in 2023, Hoxha added.

Advertisement

Stocks were on track to finish what’s set to be the worst year since 2008 not far from 2022 lows. The S&P 500’s 52-week closing low at 3,577.03 was hit on Oct. 12.

“This year really needs to end, now!” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank, who noted that the latest dip for stocks leaves the U.S. benchmark in a precarious technical position.

Advertisement

Still, the S&P 500 and Dow managed to erase losses from earlier in the week by Thursday afternoon.

If the S&P 500 can hold on to weekly gains through Friday, it would mark the end of a three-week losing streak that has been the index’s longest since September, FactSet data show.

Advertisement
Companies in focus
  • Tesla Inc. TSLA, +6.96% shares rallied 5.7% Thursday after posting its first rise in eight sessions Wednesday. The electric-vehicle maker’s shares had declined in seven consecutive sessions, their worst losing streak since a seven-session run that ended on Sept. 15, 2018.
  • Southwest Airlines LUV, +3.48% remains in focus as the airline tries to recover from logistical issues that caused thousands of flight cancellations over the past week. The stock fell 11% over the past two days, but rose 3.6% in Thursday session.
  • General Electric’s GE, +1.89% spinoff of GE HealthCare Technologies will join the S&P 500 index when it begins trading as a separate public company on Jan. 4. GE HealthCare will replace Vornado Realty Trust VNO, +1.41%, which will move to the S&P MidCap 400. Vornado will replace logistics company RXO RXO, +8.76%, which will move to the S&P SmallCap 600. GE HealthCare — trading on a when-issued basis — rose 1.2%, while Vornado was marginally higher and RXO jumped 9.6%.
  • Cal-Maine CALM, -15.53% shares slid 13.2% after its quarterly earnings came in below Wall Street forecasts. Cal-Maine reported record sales for the quarter as an avian flu outbreak continued to limit the supply of eggs, driving prices sharply higher. The company also said there were no positive tests for avian flu at any of its production facilities, as of Wednesday.
Sola Adeyemo

Recent Posts

BREAKING: Tinubu govt drops treason charges against EndBadGovernance protesters

  The Federal High Court in Abuja has dismissed the treason charges brought against the…

3 hours ago

#USRoadToWhiteHouse2024: Trump-Harris polls remain tied in battleground states…

What to know about the end of the #USElection2024 campaign The most recent polling analysis…

3 hours ago

#USElection2024 Live Updates: Trump Vs Harris…Latest Results…Latest Polls

#US election 2024 Live Updates:  What you need to know about USelection2024 latest polls •…

3 hours ago

Prince Harry and Meghan Markle pursue separate projects

A royal commentator suggests that Prince Harry and Meghan Markle are taking separate paths in…

6 hours ago

#USElection2024: Trump, Harris close campaign in swing states on eve of deadlocked election

PHILADELPHIA/GRAND RAPIDS, Michigan (Reuters) -Donald Trump and Kamala Harris both predicted victory as they campaigned…

6 hours ago

‘He’s With Us’, EFCC Confirms Ex-Gov Okowa’s Arrest Over N1.3trn Diversion

The Economic and Financial Crimes Commission (EFCC) arrested Ifeanyi Okowa, the immediate past governor of…

6 hours ago