NEW YORK CITY, RAW – The Nasdaq and S&P 500 have closed at their highest levels ever after data showed US unemployment claims declined further last week along with other mixed economic data in anticipation around Friday’s job’s report.
Initial claims for state unemployment benefits fell by 14,000 to 385,000 in the week ended July 31 while lay-offs dropped to their lowest level in more than 21 years last month as companies held on to their workers amid a labour shortage, the Labor Department’s report showed.
“The directional change has continued to be improving in the last few weeks and now it’s a new low since beginning the pandemic,” said Keith Buchanan, portfolio manager at Globalt Investments in Atlanta, Georgia.
“I think that’s what (is) kind of leading to some optimism today and earnings to this point have been positive.”
Nearly all of the 11 major S&P 500 sector indexes rose, with only healthcare stocks in the red as Cigna Corp slipped after predicting a bigger hit to full-year earnings from the pandemic.
Focus will now shift to the jobs report for July on Friday.
Analysts say a disappointing number might raise questions about an economic recovery but it could also lead the Federal Reserve to remain accommodative.
Meanwhile, Robinhood Markets Inc tumbled and was set to snap a four-day rally fuelled by interest from retail traders.
ViacomCBS Inc jumped as the company said it signed up the highest number of new streaming subscribers in the second quarter and struck a multi-year deal with Comcast Corp’s Sky to launch the Paramount+ streaming service in Europe.
The Dow Jones Industrial Average rose 248.47 points, or 0.71 per cent, to 35,041.14, the S&P 500 gained 24.53 points, or 0.56 per cent, to 4,427.19 and the Nasdaq Composite added 109.26 points, or 0.74 per cent, to 14,889.79.
Concerns about the pace of economic growth and higher inflation have pressured the S&P 500 index but stellar corporate earnings so far have put it on track to end the week higher.
The index is now flirting with a record closing high.
Fed Vice Chair Richard Clarida, a major architect of the US 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.