Spencer Platt
U.S. stocks on Thursday kicked off the penultimate trading session of the year with solid gains, as sentiment was buoyed by a higher than expected rise in jobless claims which pointed to signs of softening in a very resilient labor market.
The tech-heavy Nasdaq Composite (COMP.IND) jumped 2.27% to 10,444.73 points, as Apple (AAPL), Microsoft (MSFT), Alphabet (GOOG) (GOOGL) and Amazon (AMZN) advanced more than 2% each.
The benchmark S&P 500 (SP500) gained 1.50% to 3,839.88 points, while the blue-chip Dow (DJI) was higher by 0.87% to 33,162.08 points.
All 11 S&P sectors were trading in the green, led by heavyweight sectors Communication Services and Technology. Consumer Staples and Energy gained the least.
Volume continues to remain thin with a lot of market participants on vacation in the holiday-shortened week, while news flow is also relatively light, which may increase volatility.
“The markets are poised for brief rallies throughout the first quarter of 2023 on the heels of any data showing signs of slowing inflation and expectations that the Fed will initiate smaller rate increases as a result of decelerating inflation,” Richard Saperstein, CIO at Treasury Partners, said. “We expect these stock market rallies to be short-lived.”
“As the economy slows due to the lag effects of Fed tightening, we expect lower earnings estimates, which is likely to put pressure on stock prices for the balance of 2023.”
In the major economic news of the day, the number of Americans filing for weekly jobless claims climbed by 9K to 225K, higher than the expected 222K level.
The data hinted at some easing in a supercharged jobs market. The Federal Reserve is keeping a close eye on the labor market to gauge the pace of its rate hikes.
U.S. stocks have been largely subdued since the Fed earlier this month made hawkish projections and comments that pointed towards higher rates for longer. Hopes of a year-end “Santa Claus” rally had largely faded, but today’s jobless claims data seems to have sparked some life back into the markets.
Turning to the bond markets, rates were mixed. The 10-year Treasury yield (US10Y) was down 3 basis point to 3.86% and the 2-year yield (US2Y) was up 3 basis points to 4.39%.
Among active stocks, Apple rebounded from a new 52-week low on Wednesday, after a report that Foxconn’s iPhone plant was at 70% capacity.
Tesla (TSLA) also rallied after a recent big skid, with the electric vehicle maker the top percentage gainer on the S&P 500.
UK-based biotech F-star Therapeutics (FSTX) slumped after a government agency objected to its deal with China’s Sino Biopharma (OTCPK:SBHMY) (OTCPK:SBMFF).
Image and article originally from seekingalpha.com. Read the original article here.