4.12pm: S&P 500 breaks losing streak
The S&P 500 broke its five-day losing streak and other US markets moved higher as an increase in weekly jobless claims numbers was taken as a sign that the pace of interest rate hikes could soon slow.
At the close the Dow Jones Industrial Average was up 184 points, or 0.55%, to 33,781, the S&P 500 jumped 30 points, or 0.75%, to 3,964 and the Nasdaq Composite rose 123 points, or 1.1%, to 11,082.
“We had a strong selloff over the last few days and it doesn’t take much to create even the underpinnings for a modest rally,” Quincy Krosby, LPL Financial’s chief global strategist told CNBC.
Investors have largely preferred to remain sidelined ahead of another round of key data with the producer price index and the University of Michigan's consumer sentiment survey due tomorrow, followed by November's consumer price data and the Fed's policy decision next week.
Stocks on the move included Activision Blizzard Inc (NASDAQ:ATVI) which slipped 1.5% as the FTC filed a lawsuit seeking to block Microsoft’s planned $69 billion acquisition of the video game developer.
But on the up was Moderna Inc which advanced 2.3% after the US Food and Drug Administration authorized COVID-19 shots from the vaccine maker that target both the original coronavirus and Omicron sub-variants for use in children as young as six months of age.
12:07pm: S&P 500 on pace to snap losing streak
At midday, the Dow was up 203 points, 0.6%, to 33,801, the Nasdaq added 106 points, 1%, to 11,065 and the S&P 500 improved 26 points, 0.7%, to 3,960.
If things hold, the S&P 500 will snap a five-session losing streak.
“US markets are enjoying a welcome break from the selling pressure that has dominated this week thus far, with the Nasdaq surging upward after a five-day losing streak that has brought over 4% of downside," said Joshua Mahony, senior market analyst at online trading platform IG.
"To a large extent this week highlights how traders have to somehow weigh up the benefits of a gradual Chinese reopening with the fears of an impending economic contraction in the year ahead. While the resurgence in equities seen today does highlight the interchangeable nature of market sentiment at the moment, the surge in natural gas seen since Tuesday does highlight how a cold snap in Europe could once again test the bulls if inflation fears resurface. ”
9.35am: Unemployment claims data points to softening of US labor market
US stocks opened slightly higher on Thursday as investors remained wary of growing recession risks ahead of the Fed’s December rate decision next week.
Just after the market opened, the Dow Jones Industrial Average had added 115 points or 0.3% at 33,713 points, the S&P 500 was up 8 points or 0.2% at 3,942 points, and the Nasdaq Composite was up 11 points or 0.1% at 10,970 points.
Meanwhile, there have been further signs the US labor market is softening with initial jobless claims for the week ended December 3 coming in at 230,000.
This is up by 4,000 from the previous week’s revised level and on par with the consensus analyst forecast.
Pantheon Macroeconomics chief economist Ian Shepherdson said this measure was trending upwards, with the four-week average now standing at 230,000, the highest since early September, having jumped from a low of 206,000 in early October.
“Claims are noisy, especially from Thanksgiving through mid-January, and we expect numbers closer to 215,000 over the next couple weeks but we think the trend will be materially higher once the holiday seasonal adjustment distortions fade,” he said.
Shepherdson noted that the surge in layoff announcements recorded by Challenger (which captures publicly announced layoffs but misses quiet layoffs at smaller firms) pointed clearly to a steep increase in claims, though he noted that Challenger’s numbers were more volatile and could not be used to forecast claims in the short term.
“Short-term volatility aside, the upturn in the trend in initial claims is evidence that the labor market is softening, and it’s just a matter of time before payroll growth weakens,” he said.
6.30am: Little change expected when markets open
Wall Street is expected to open where it left off yesterday as markets takes a breather from recent volatility amid little news ahead of next week’s consumer inflation data and the final meeting of the year of the Federal Reserve’s Open Market Committee.
Futures for the Dow Jones Industrial Average rose just 3 points, or 0.01%, in Thursday pre-market trading, while those for the broader S&P 500 index added 0.1% and the Nasdaq gained 0.2%.
Stocks ended flat yesterday, with the Dow gaining just 1 point to 33,597, while the S&P 500 fell, for a fifth consecutive day, by 7 points, or 0.2%, to 3,934 and the Nasdaq Composite dipped 56 points, or 0.5%, 10,959.
“Wall Street made little progress during Wednesday’s session and futures suggest we’ll see little change at today’s open,” commented James Hughes, chief market analyst at Scope Markets.
"There has been limited economic data in play this week, but yesterday’s marked decline in US mortgage applications served up another stark reminder that the Fed’s policy tightening exercise is having an impact. That in turn is going to be adding to concerns that the US could see a broader economic slump as we move into 2023.
Naeem Aslam, chief market analyst at AvaTrade, highlighted US Initial Jobless Claims data due today, with a forecast for 230,000 from the previous reading of 225,000.
“But none of these economic numbers is the real deal for the markets,” Aslam said.
“The economic data and the economic event that matters the most are slated for the next week and it is the US CPI inflation data that will determine the future path of US equity. In addition, the Fed will also announce its monetary policy next week and the US CPI reading is highly likely to influence their decision,” Aslam added.