Dow up nearly 400 points as jobless claims data deemed ‘welcome news for the Fed’

U.S. stocks advanced Thursday, erasing losses from earlier in the week during the second-to-last trading session of the year.

The main indexes built on premarket gains after U.S. weekly jobless claims data showed the number of workers receiving benefits has climbed to the highest level since February, a sign that the Federal Reserve’s interest-rate hikes might be slowing economic growth and inflation.

How are stocks trading
  • The S&P 500

    rose 69 points, or 1.8%, to 3,851.

  • Dow Jones Industrial Average

    added 379 points, or 1.2%, to 33,255.

  • Nasdaq Composite

    climbed 269 points, or 2.6%, to 10,482.

On Wednesday, the Dow Jones Industrial Average fell 366 points, or 1.1%, to 32876, the S&P 500 declined 46 points, or 1.2%, to 3783, and the Nasdaq Composite dropped 140 points, or 1.35%, to 10,213, its lowest closing level of the year.

The S&P 500 is up more than 6% from its 2022 low from mid-October, but the large-cap index remains down more than 19% year-to-date.

What’s driving markets

The penultimate session of 2022 was showing tentative signs of delivering some much needed festive cheer for the stock market as a hoped for “Santa Claus rally” has so far failed to materialize.

Stocks advanced as data showed the number of Americans receiving more than a single week of unemployment benefits had climbed by 41,000 last week to 1.71 million, the highest level in 10 months.

See: U.S. jobless claims move higher in latest week

The jobless-claims data “points to a loosening in the labor market, which is welcome news for the Fed,” said Larry Adam, chief investment officer at Raymond James, in a tweet.

Stocks are on track to finish what’s set to be the worst year since 2008 not far from their 52-week lows. The S&P 500’s 52-week closing low, reached 3,577.03, reached on Oct. 12, according to FactSet data.

“This year really needs to end, now!” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank, who noted that the latest dip for stocks leaves the U.S. benchmark in a precarious technical position.

Still, the S&P 500 and Dow managed to erase losses from earlier in the week by midday Thursday.

If the S&P 500 can hold on to weekly gains through Friday, it would mark the end of a three-week losing streak that has been the index’s longest since September, FactSet data show.

Companies in focus
  • Tesla

    rallied Thursday after posting its first rise in eight sessions Wednesday. The electric-vehicle maker’s shares had declined in seven consecutive sessions, their worst losing streak since a seven-session run that ended on Sept. 15, 2018.

  • Southwest Airlines

    remains in focus as the airline tries to recover from logistical issues that caused thousands of flight cancellations over the past week. The stock fell 11% over the past two days.

  • General Electric’s

    spin-off of GE HealthCare Technologies will join the S&P 500 index when it begins trading as a separate public company on Jan. 4. GE HealthCare will replace Vornado Realty Trust
    which will move to the S&P MidCap 400. Vornado will replace logistics company RXO
    which will move to the S&P SmallCap 600. GE HealthCare — trading on a when-issued basis — rose, while Vornado was marginally lower and RXO jumped.

  • Cal-Maine

    slid after its quarterly earnings came in below Wall Street forecasts. Cal-Maine reported record sales for the quarter as an avian flu outbreak continued to limit the supply of eggs, driving prices sharply higher. The company also said there were no positive tests for avian flu at any of its production facilities, as of Wednesday.

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