S&P 500 snaps losing streak on jobless claims rise

  • Weekly jobless claims rise in line with estimates
  • Moderna and Pfizer in place as FDA clears updated COVID boosters
  • Exxon climbs after strengthening its buyback program

December 8 (Reuters) – The S&P 500 (.SPX) closed higher on Thursday, ending a five-game losing streak as investors pushed the index higher after interpreting data showing a rise in weekly jobless claims as a sign that the pace of unemployment rate hikes Interest may slow soon.

Wall Street’s major indices have come under pressure in recent days, with the benchmark losing 3.6% since early December on expectations of a longer rate hike cycle and pessimistic economic views from some executives. of companies.

Such thinking had also weighed on the tech-heavy Nasdaq composite index. (.IXIC)which had posted four consecutive losing sessions before Thursday.

However, investors took some comfort after data showed the number of Americans filing for unemployment benefits rose moderately last week, while unemployment figures hit a 10-month high around the end of November.

The report follows data last Friday that showed U.S. employers hired more workers than expected in November and raised wages, sparking fears the Fed might stick to its aggressive stance to rein in high inflation. for decades.

“The market has to adjust to the fact that we are moving from an economy based on stimulus – both fiscal and monetary – to an economy based on fundamentals, and that is what we are facing right now” said Wiley Angell, chief market strategist at Ziegler Capital Management.

The Producer Price Index and Consumer Sentiment Survey from the University of Michigan on Friday and consumer price data for November next week will also be in focus ahead of the policy decision by the Fed on December 14.

Investors see a 93% chance that the US central bank will raise the main policy rate by 50 basis points to 4.25-4.50%, with rates peaking in May 2023 at 4.92%.

The US central bank has raised its key rate by 375 basis points this year, the fastest pace since the 1980s.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., December 7, 2022. REUTERS/Brendan McDermid

The aggressive approach has stoked fears of a recession, with top executives at major U.S. financial institutions including JPMorgan, BlackRock and Citi forecasting a likely economic downturn in 2023.

Adding to fears, the yield curve between 2-year and 10-year Treasuries has also widened in recent days.

According to preliminary data, the S&P 500 (.SPX) gained 29.89 points, or 0.76%, to finish at 3,963.81 points, while the Nasdaq Composite (.IXIC) gained 125.84 points, or 1.15%, to 11,084.39. The Dow Jones Industrial Average (.DJI) rose 174.89 points, or 0.54%, to 33,772.81.

Most of the 11 major S&P 500 sectors rose, led by a gain in tech stocks (.SPLRCT).

Most mega-cap tech and growth stocks such as Apple Inc (AAPL.O)Nvidia Corporation (NVDA.O) and Amazon.com Inc. (AMZN.O) Pink.

Microsoft Corp. (MSFT.O) ended higher, despite giving up some intraday gains after the Federal Trade Commission filed a lawsuit seeking to block the tech giant’s $69 billion bid to buy Activision Blizzard Inc. The game maker” Call of Duty” closed lower.

The energy index (.SPNY) was one of the exceptions despite Exxon Mobil Corp’s gain after announcing it would expand its $30 billion share buyback program. The sector had been under pressure in recent sessions due to falling commodity prices: US crude is now near its level at the start of 2022.

Meanwhile, Moderna Inc. (ARNM.O) advanced after the U.S. Food and Drug Administration cleared the vaccine maker’s COVID-19 injections that target both the original coronavirus and Omicron subvariants for use in children as young as six months old.

The regulator has also approved similar guidelines for fellow COVID vaccine maker Pfizer Inc. (PFE.N)which rose, and its partner BioNTech, whose US-listed shares gained.

Rent the Track Inc (LOCATION.O) jumped after the clothing rental company raised its revenue forecast for 2022.

Reporting by Shubham Batra, Ankika Biswas, Johann M Cherian in Bengaluru and David French in New York; Editing by Vinay Dwivedi, Sriraj Kalluvila, Anil D’Silva and Richard Chang

Our standards: The Thomson Reuters Trust Principles.

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