Wall St rises higher as jobless claims fall, Robinhood weighs on Nasdaq
U.S. stock indexes rose on Thursday after data showed fewer Americans filed for unemployment benefits last week. At the same time, a decline in shares of online broker Robinhood capped gains on the Nasdaq.
Initial claims for state unemployment benefits fell by 14,000 to 385,000 in the week ended July 31, while layoffs dropped to their lowest level in more than 21 years last month as companies held on to their workers amid a labor shortage, the Labor Department’s report showed.
The focus will now shift to the jobs report for July on Friday.
A disappointing employment report might raise questions about the economic recovery, but it would also lead the Federal Reserve to remain accommodative, said Sean O’Hara, president at Pacer ETFs.
The benchmark S&P 500 index closed just below a record high on Wednesday. Concerns about the pace of economic growth and higher inflation have pressured the index, but stellar corporate earnings so far have put it on track to end the week higher.
A Wall Street sign is pictured outside the New York Stock Exchange in New York, October 28, 2013. REUTERS/Carlo Allegri
“I think the economy and markets have gone from feeling really confident to being a little uncertain, considering the rising risks of inflation and the Delta variant,” O’Hara said.
Pulling world stocks down from all-time highs, Fed Vice Chair Richard Clarida, a major architect of the central bank’s new policy strategy, said on Wednesday he felt the conditions for raising interest rates could be met by the end of 2022.
Ten of the 11 major S&P 500 sector indexes were higher in early trading, with only healthcare stocks in the red as health insurer Cigna Corp dropped 12.6% on doubling its estimate of the hit to full-year earnings from the pandemic.
Moderna Inc rose 2% after the company beat expectations for second-quarter sales and said its COVID-19 shot was about 93% effective through six months after the second dose, showing hardly any change from the 94% efficacy reported in its original clinical trial.
Robinhood Markets Inc tumbled 13.0% and was set to snap a four-day rally fueled by interest from retail traders.
Shares in Electronic Arts Inc rose 0.6% after it forecast current-quarter adjusted sales above estimates. Rivals Take-Two and Activision Blizzard fell about 1% each.
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At 9:49 a.m. ET, the Dow Jones Industrial Average was up 121.96 points, or 0.35%, at 34,914.63, the S&P 500 was up 12.28 points, or 0.28%, at 4,414.94 and the Nasdaq Composite was up 47.91 points, or 0.32%, at 14,828.44.
Of the 340 companies in the S&P 500 that have reported earnings so far, a record 87.6% have beat profit estimates, as per Refinitiv IBES data. Overall, analysts expect second-quarter profit at S&P 500 companies to jump 90.2% versus a year ago.
Advancing issues outnumbered decliners by a 2.47-to-1 ratio on the NYSE and a 1.94-to-1 ratio on the Nasdaq. The S&P index recorded 35 new 52-week highs and four new lows, while the Nasdaq recorded 54 new highs and 48 new lows.
(Reporting by Shreyashi Sanyal and Shashank Nayar in Bengaluru; Editing by Aditya Soni)
