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

by | Dec 29, 2022 | Stock Market

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.

How are stocks trading
The S&P 500
SPX,
+1.83%
rose 70 points, or 1.8%, to 3,853.

Dow Jones Industrial Average
DJIA,
+1.13%
added 385 points, or 1.2%, to 33,256.

Nasdaq Composite
COMP,
+2.59%
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? 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. See: U.S. jobless claims move higher in latest week 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. “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. Stocks were on track to finish what’s set to be the wor …

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