Major U.S. stock averages were higher on Thursday as weekly jobless claims eased fears of a U.S. recession.
Nasdaq Index (Ingredients: IND) used to be +3%is expected to have the best trading day in 2024. Industrial Average (DJI) used to be +1.9%and the S&P 500 Index (SP500) used to be +2.4%. All 11 S&P 500 sectors advanced, including +3% Developments in the field of information technology (XLK). Nvidia(NVDA), Tesla (Tesla), other Magnificent 7 stocks rose.
Stocks rose after data showed initial jobless claims fell more than expected over the past week, falling 17,000 to 233,000, compared with consensus expectations of 241,000.
“Stocks are recovering from yesterday’s ugly intraday reversal as recession fears take a backseat. [Thursday’s] “Labor conditions have not deteriorated as much as expected over the past two weeks,” Interactive Brokers senior economist Jose Torres said in a note. “Continuing claims have increased, but not significantly,” he said.
Wall Street’s main volatility gauge (VIX) fell -11% to 24.65. During the sell-off earlier this week, the index surged to pandemic-era levels, reaching above 65.
Chris Zaccarelli, chief investment officer at the Alliance of Independent Advisors, said in a note that the Labor Department report provided a “boost” to markets, which have “recovered from the sharp declines seen earlier this month.” . “The narrative quickly shifted from the Fed’s surgical move to maintain interest rate cuts to full-blown concerns that the U.S. was entering a recession.”
Wall Street’s major averages have retreated from recent highs and the Nasdaq (COMP: IND) has fallen into a correction as worries about an economic recession intensified following the release of the U.S. non-farm payrolls report for July.
Zaccarelli said: “The signs of slowing growth are obvious to anyone who cares to pay attention, but with GDP growth of 2.8% as a starting point, it is difficult to believe that a recession has begun.” The panic that began at the beginning of this month is exaggerated. .
Stocks appeared to be underwhelmed by the $25B 30-year bond auction. The bid-to-bid ratio at last month’s auction was 2.31, while the previous month’s bid-to-bid ratio was 2.30. The high yield is 3.14% vs. 4.405%. The 30-year Treasury yield (US30Y) rose 4 basis points to 4.30%. The 10-year Treasury yield (US10Y) rose 4 basis points to 3.99%. On the shorter end of the yield curve, the 2-year Treasury yield (US2Y) rose 9 basis points to 4.06%.
Wall Street had a volatile trading day on Wednesday, opening strong but ultimately closing lower. Sentiment was somewhat dampened by weak auctions in the $42B bond market.
Elsewhere on the economic front, preliminary June wholesale inventories rose 0.2% month-on-month to $903.0B, versus expectations of +0.2% and +0.5% previously (revised to +0.5% from +0.6%).
Among individual stocks, Viatris (VTRS) is +5.5% The drugmaker, whose product lineup includes Viagra and Lipitor, beat consensus estimates in the second quarter and raised its full-year new product revenue forecast to between $500 million and $600 million.
Eli Lilly and Company (LLY) is +9.5% The drugmaker beat second-quarter expectations and raised its full-year outlook, largely due to the runaway success of its weight-loss products, including Mounjaro.
Warner Bros. Discovery Channel (WBD) -8.7% Second-quarter results fell short of market expectations. Its net loss widened to $9.99B from $1.24B a year ago.
