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

Why Seyi Tinubu Can’t Be Lagos Governor- Igbokwe

A member of the All Progressives Congress (APC), Joe Igbokwe, has said Seyi Tinubu, son…

5 hours ago

Simon Ekpa Not Our Member, Should Not Be Associated With Us- IPOB

IPOB PRESS RELEASE 22/11/2024 SIMON EKPA IS NOT AN IPOB MEMBER AND MUST NOT BE…

8 hours ago

NEWSPAPER HEADLINES FOR FRIDAY 22ND NOVEMBER 2024

NEWSPAPER HEADLINES FOR FRIDAY 22ND NOVEMBER 2024. *PUNCH* Gombe begins N28bn Assembly, high court complexes…

9 hours ago

My husband assaulted me, ruined my career – Olajumoke Onibread

Former bread seller turned model, Olajumoke Orisaguna, popularly known as Olajumoke Onibread, has opened up…

12 hours ago

“I did not punch Akpabio” – Senator Bamidele speaks on alleged fight with Senate President

Senate Majority Leader, Opeyemi Bamidele has denies reports that he was involved in a fight…

12 hours ago

Speaker Obasa Clarifies Negative Perceptions As Sanwo-Olu Presents 2025 Budget

– says lawmakers united to meet yearnings of Lagosians – accuses detractors of peddling news…

12 hours ago