Dow up 300 points as jobless claims data seen as ‘good news for the Fed’
US stocks rebounded in early trading on Thursday after the Nasdaq nearly hit a 30-month low a day earlier as the market appeared poised to make up for some of its recent losses on the penultimate trading day of the year.
Major indices built on pre-market gains after weekly data on US jobless claims showed that the number of workers receiving benefits rose to the highest level since February, a sign that the Federal Reserve’s interest rate hike can slow down economic growth and inflation.
How shares are traded
S&P 500 SPX,
rose 58 points, or 1.5%, to 3841.
Dow Jones industrial index DJIA,
added 321 points, or 1%, to 33,197.
Nasdaq Composite COMP,
rose 223 points, or 2.2%, to 10,436.
On Wednesday, the Dow Jones Industrial Average fell 366 points, or 1.1%, to 32876, the S&P 500 fell 46 points, or 1.2%, to 3783, and the Nasdaq Composite fell 140 points, or 1.35. %, up to 10213, the lowest level. closing level of the year.
The S&P 500 is up more than 6% from its 2022 low in mid-October, but the index remains down 20.1% year-to-date.
What drives the markets
The penultimate session of 2022 showed tentative signs of a much-needed holiday cheer for the stock market as the long-awaited Santa Claus rally has yet to come to fruition.
Stocks rose after the open after data showed the number of Americans receiving more than one week of unemployment benefits rose by 41,000 last week to 1.71 million, the highest level in 10 months.
See: US jobless claims rose last week
Jobless claims data “indicates a weakening labor market, which is welcome news for the Fed,” Larry Adam, chief investment officer of Raymond James, wrote in a tweet.
Stocks are on track to end their worst year since 2008 near their year lows. The Nasdaq Composite will start Thursday at its lowest intraday level in 30 months, down 36.4% from its November 2021 peak.
“This year really needs to end, now!” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank, who noted that the recent plunge in share prices puts the US benchmark in a technically dubious position.
If the major indexes end the week lower, it would be the S&P 500’s fourth consecutive such loss, the longest streak of weekly declines since May, according to FactSet data.
For the Dow, which finished higher last week and continued to rise, the weekly loss would be the third week of decline in four.
Companies in the spotlight
rose on Thursday after the first rise in eight sessions on Wednesday. Shares of the electric car maker have been down for seven consecutive sessions, marking their worst losing streak since the seven sessions ending September 15, 2018.
remains in the spotlight as the airline struggles to recover from logistical problems that have caused thousands of flights to be canceled over the past week. Shares are down 11% over the past two days.
spin-off GE HealthCare Technologies will join the S&P 500 when it begins trading as a separate public company on January 4. GE HealthCare will replace Vornado Real Estate Trust
which will switch to S&P MidCap 400. Vornado will replace the logistics company RXO
which will move into the S&P SmallCap 600. GE HealthCare, which trades based on the release date, rose while Vornado edged slightly lower and RXO jumped.
fell after its quarterly earnings came in below Wall Street’s forecasts. California’s Maine reported record sales for the quarter as the bird flu outbreak continued to restrict egg supplies, driving prices up sharply. The company also said that as of Wednesday, none of its manufacturing facilities had tested positive for avian flu.
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