US STOCK indexes rose on Thursday after data showed fewer Americans filed for unemployment benefits last week, while a decline in shares of health insurer Cigna dragged healthcare stocks lower.
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 labour shortage, the Labour Department’s report showed.
“Investors are appreciating the fact that it is unlikely for the US to go into another shutdown and with economic growth in full steam and interest rates at such lows interest towards equities seems intact,” Kingsland Growth Advisors chief investment officer Arthur Weise commented.
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 plunged 13.2% and was set to snap a four-day rally fuelled by interest from retail traders.
“I think Robinhood is the latest stock in the retail Reddit crowd has embraced, but the question remains how long will it last,” Weise remarked.
Ten of the 11 major S&P 500 sector indexes were higher in early afternoon trading, with only healthcare stocks in the red as Cigna Corp tumbled 12.4% after predicting a bigger hit to full-year earnings from the pandemic.
ViacomCBS Inc jumped 6.5% 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.
At 11.54am ET, the Dow Jones Industrial Average was up 205.61 points, or 0.59%, at 34,998.28, the S&P 500 was up 18.85 points, or 0.43%, at 4,421.51 and the Nasdaq Composite was up 92.02 points, or 0.62%, at 14,872.55.
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 central bank’s new policy strategy, said on Wednesday that he felt the conditions for raising interest rates could be met by the end of 2022.
Advancing issues outnumbered decliners by a 2.37-to-1 ratio on the NYSE and by a 2.17-to-1 ratio on the Nasdaq.
The S&P index recorded 43 new 52-week highs and four new lows, while the Nasdaq recorded 92 new highs and 81 new lows. – Aug 6, 2021
