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The stock market finished higher again on Thursday, adding to the upward momentum that has marked most of the week so far. The advance represented the third consecutive day of gains for the major U.S. equity averages.
Shares stumbled out of the gate amid worries spurred by a surprisingly hawkish turn by the European Central Bank. However, investors took heart from a rise in initial jobless claims, a fact that could help tame some Fed hawkishness. Well-received earnings from Tesla also contributed to the upswing.
The Nasdaq (COMP.IND) finished +1.4%, S&P (SP500) ended +1.0% and the Dow (DJI) closed +0.5%.
Rates saw downward pressure after a jump in jobless claims indicated a softening labor market. Odds of a 75-basis-point hike next week rose to more than 70% as odds of a full-point hike declined.
The 10-year Treasury yield dropped 12 basis point to 2.91% and the 2-year yield declined 15 basis points to 3.10%.
Weekly jobless claims rose unexpectedly, hitting an eight-month high at 251K. They are up from a low of 166K in mid-March, Bespoke Investment noted.
Based on claims and JOLTs, the breakeven point where nonfarm payrolls jobs growth would stop is roughly 275K, Renaissance Macro Research tweeted.
In other economic news, the July Philly Fed Index fell unexpectedly, dropping down to -12.3. But the prices paid index fell for the third month in a row to 52.20 from 64.50. That’s the lowest level since January 2021.
Before that, the ECB boosted rates by 50 basis points. It was the first ECB hike in more than a decade and double what economists were expecting.
“Very important developments on @ECB front,” Gregory Daco, chief economist at EY Parthenon tweeted. “Front-loading of rate hikes & forward guidance disappears: ‘…Governing Council to make a transition to a meeting-by-meeting approach.'”
Among active stocks, Carnival was among the biggest decliners in the S&P after a weak pricing of a $1B stock offering.
Image and article originally from seekingalpha.com. Read the original article here.