Pullback By Jobless Claims Contributes To Rally On Wall Street
08 Agosto 2024 - 5:36PM
IH Market News
Stocks moved sharply higher during trading on Thursday, with the
major averages more than offsetting the downturn seen over the
course of the previous session. The major averages surged early in
the session and saw further upside as the day progressed.
The major averages moved roughly sideways going into the close,
hovering near their best levels of the day. The Nasdaq soared
464.22 points or 2.9 percent to 16,660.02, the Nasdaq spiked 119.81
points or 2.3 percent to 5,319.31 and the Dow jumped 683.04 points
or 1.8 percent to 39,446.49.
The rally on Wall Street came after the Labor Department
released a report showing first-time claims for U.S. unemployment
benefits pulled back by more than expected in the week ended August
3rd.
The report said initial jobless claims fell to 233,000, a
decrease of 17,000 from the previous week’s revised level of
250,000.
Economists had expected jobless claims to edge down to 240,000
from the 249,000 originally reported for the previous week.
The bigger than expected decline came a week after jobless
claims reached their highest level since hitting 258,000 in the
week ended August 5, 2023.
The data helped ease concerns about the strength of the labor
market, which have contributed to recent selling on Wall
Street.
“Initial jobless claims are taking center stage as economists
and investors seek guidance from real-time indicators on the
economy’s health,” Nationwide Financial Markets Economist Oren
Klachkin.
“To us, the data suggest we’re on track for a cooldown – not a
recession,” he added. “However, risks are tilted to the downside
and the Fed should be vigilant for non-linearities as it maintains
a restrictive policy stance.”
Among individual stocks, athletic apparel company Under Armour
(NYSE:UAA) skyrocketed by 19.2 percent after reporting an
unexpected fiscal third quarter profit.
Eli Lilly (NYSE:LLY) also moved sharply higher after the drug
maker reported better than expected second quarter results and
raised its full-year revenue guidance.
On the other hand, shares of Warner Bros. Discovery (NASDAQ:WBD)
slumped after the company reported disappointing second quarter
results and announced a $9.1 billion write down tied to its TV
networks.
Sector News
Networking stocks turned in some of the market’s best
performances on the day, resulting in an 8.4 percent spike by the
NYSE Arca Networking Index.
Substantial strength was also visible among semiconductor
stocks, as reflected by the 6.9 percent surge by the Philadelphia
Semiconductor Index.
Shares of Lattice Semiconductor (NASDAQ:LSCC) soared by 13.3
percent after Raymond James upgraded its rating on the company’s
stock to Outperform from Market Perform.
Pharmaceutical stocks also saw considerable strength on the
upbeat results from Eli Lilly, with the NYSE Arca Pharmaceutical
Index jumping by 3.6 percent.
Airline, computer hardware and biotechnology stocks also moved
notably higher, while telecom stocks were among the few groups that
bucked the upward trend.
Other Markets
In overseas trading, stock markets across the Asia-Pacific
region moved mostly lower during trading on Thursday. Japan’s
Nikkei 225 Index slid by 0.7 percent, while South Korea’s Kospi
fell by 0.5 percent.
Meanwhile, the major European markets turned in a mixed
performance on the day. While the German DAX Index climbed by 0.4
percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index both
fell by 0.3 percent.
In the bond market, treasuries extended their recent pullback in
reaction to the initial jobless claims data. As a result, the yield
on the benchmark ten-year note, which moves opposite of its price,
rose by 2.9 basis points to 3.997 percent.
Looking Ahead
Amid a quiet day on the U.S. economic front, trading on Friday
may be impacted by reaction to the latest corporate earnings
news.
SOURCE: RTTNEWS
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