U.S. stocks rose on Thursday as investors awaited Friday’s highly anticipated jobs report to gauge the pace of the labor-market recovery.
The Dow Jones Industrial Average added 150 points to hit an all time high after reaching a record close in the previous session. The S&P 500 was 0.2% higher. The Nasdaq Composite dipped 0.2%.
The gains came after a better-than-expected reading on jobless claims. First-time claims for unemployment insurance totaled 498,000 for the week ended May 1, hitting a fresh pandemic-era low and better than a Dow Jones estimate of 527,000.
The data came one day before April’s jobs report is released on Friday. Economists polled by Dow Jones expect a total of 978,000 payrolls to have been added last month and the unemployment rate is expected to fall to 5.8% from 6%.
“Today’s read is another proof point that we’re one step closer to full economic recovery, sooner than some may have expected,” said Mike Loewengart, managing director of investment strategy at E-Trade Financial. “As we see some serious momentum building on the jobs front, all eyes will be on how this plays into action taken by the Fed, if any.”
PayPal shares jumped 1.5% after the company posted better-than-expected earnings and said revenue last quarter surged 31%.
Etsy tanked by 11% after warning that sales will slow as the pandemic boost wanes.
The Nasdaq Composite posted its fourth straight negative session on Wednesday for its longest daily losing streak since October. The tech-heavy index and S&P 500 are each lower for the week. The Dow is on track to break a two-week losing streak.
“Technology sector earnings momentum relative to the broader market peaked in late May of 2020,” said Keith Lerner, chief market strategist at Truist. “Given that we expect the economy to grow well above trend this year and next, value stands to benefit. Indeed, when looking at the value indices, they are dominated by financials and tend to have greater exposure to economically-sensitive sectors that are more leveraged to an economic recovery.”
The Russell 1000 Value index has gained 16% this year, while the Russell 1000 Growth index has advanced 5%.
However, he added that concerns still remain in the market. For one, federal stimulus packages have boosted growth, and at some point, the economy will have to return to organic growth.
The busiest week of earnings is now in the rearview mirror, but a number of companies have yet to provide their quarterly updates.
Dropbox, Expedia, Roku, Beyond Meat, Shake Shack and Square will report after the market closes.
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