Stocks Rise After Jobless Claims, GDP Data - WSJ
By: Anna Hirtenstein and Karen Langley (WSJ)
S E E D E D C O N T E N T
U.S. stocks rose Thursday after jobless claims fell to a new pandemic low in another sign of economic reopening.
The Dow Jones Industrial Average advanced 0.4%, or about 130 points, while the S&P 500 gained 0.3%. The tech-heavy Nasdaq Composite added 0.1%.
Stocks have risen this week as investors grew more comfortable with the idea that the Federal Reserve will maintain its supportive monetary policy despite near-term inflation. Officials have indicated in recent days that there are no plans for imminent policy changes.
Markets stumbled earlier in the month after a sharp rise in consumer prices heightened concerns that the central bank would accelerate its timeline for scaling back easy-money policies.
"Now that we are moving along with the recovery, we're dealing with some potential issues that include higher inflation," said Katerina Simonetti, private wealth adviser at Morgan Stanley Private Wealth Management. "Even though the Federal Reserve is going with the narrative that it is perhaps temporary in nature and it is post-Covid-recovery driven, it's still a concern on a lot of investors' minds."
In another sign of a healing U.S. labor market, data Thursday showed that worker filings for jobless benefits fell again to a new pandemic low . Initial unemployment claims for regular state programs, a proxy for layoffs, fell last week to 406,000 from 444,000 the previous week, a steeper decline than economists had forecast.
A separate report showed that U.S. gross domestic product, a broad measure of the economy’s output of good and services, rose at a 6.4% annual rate in the first quarter, the same as in an initial estimate.
The spurt of growth spurred by the economy reopening may be nearing its peak, said Andrew Cole, a multi-asset fund manager at Pictet Asset Management. “We’ll likely see a deceleration in the growth rate from here and that’s always an uncomfortable time for markets.”
Investors this week have refocused their attention on the so-called meme stocks that captivated social media and the broader public earlier this year. Shares of AMC Entertainment rose 13%, on pace for their highest close since 2017. GameStop shares dropped 3.2%.
Among other stocks, Ford Motor shares gained 7%, rising for a second day after saying it expected 40% of its vehicle volume to be fully electric by 2030. Best Buy shares added 1.4% after it raised its outlook for annual comparable sales, saying that demand for technology products remained high.
In bond markets, the yield on the benchmark 10-year Treasury note ticked up to 1.616% from 1.572% on Wednesday.
Overseas, the pan-continental Stoxx Europe 600 edged up 0.3%. In Asia, major benchmarks were mixed. The Shanghai Composite Index added 0.4% while Hong Kong’s Hang Seng Index declined 0.2%.
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