US STOCKS-S&P 500 rebounds as investors take rate hike cues from jobless claims rise
08/12/2022 19:16
(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window.)
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Weekly jobless claims rise in line with estimates
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Moderna, Pfizer up as FDA authorizes updated COVID
boosters
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Exxon climbs after boosting buyback program
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Indexes up: Dow 0.76%, S&P 0.98%, Nasdaq 1.45%
(Updates to early afternoon)
By Ankika Biswas and David French
Dec 8 (Reuters) - The S&P 500 index .SPX rose on
Thursday, looking on course to snap a five-session losing
streak, as technology shares led a broad-based recovery with
investors seeing a rise in weekly jobless claims as a sign the
pace of interest rate hikes could soon slow.
Wall Street's main indexes have come under pressure in
recent days, with the benchmark index shedding 3.6% so far in
December on expectations of a longer rate-hike cycle and
downbeat economic views from some top company executives.
However, investors drew some comfort on Thursday after data
showed the number of Americans filing claims for jobless
benefits increased moderately last week, while unemployment
rolls hit a 10-month high toward the end of November.
The report follows data last Friday that showed U.S.
employers hired more workers than expected in November and
increased wages, spurring fears that the Fed might stick to its
aggressive stance to tame decades-high inflation.
"Markets are looking like they've got a little window here
for a relief rally before next week's CPI data, since we were
oversold here," said Dennis Dick, a market structure analyst and
trader at Triple D Trading.
"You're just starting to see a few people coming in buying
the dip."
The producer price index and the University of Michigan's
consumer sentiment survey on Friday and November's consumer
price data next week will also be in focus ahead of Fed's policy
decision on Dec. 14.
Investors see a 93% chance that the U.S. central bank will
hike the key benchmark rate by 50 basis points to 4.25-4.50%,
with the rates peaking in May 2023 at 4.92%. FEDWATCH
The U.S. central bank has raised its policy rate by 375
basis points this year, the fastest pace since the 1980s.
This aggressive approach has stoked worries of a recession,
with top executives of major U.S. financial institutions
including JPMorgan, BlackRock and Citi forecasting a likely
economic downturn in 2023.
Adding to the fears, the yield curve between the 2-year
US2YT=RR and 10-year Treasury notes US10YT=RR has also
widened in the recent days.
By 1:46 p.m. ET, the Dow Jones Industrial Average .DJI
rose 256.92 points, or 0.76%, to 33,854.84; the S&P 500 .SPX
gained 38.46 points, or 0.98%, at 3,972.38; and the Nasdaq
Composite .IXIC added 158.93 points, or 1.45%, at 11,117.48.
All 11 major S&P 500 sectors rose, led by a 1.8% gain in
technology stocks .SPLRCT .
Most mega-cap technology and growth stocks such as Apple Inc
AAPL.O , Nvidia Corp NVDA.O and Amazon.com Inc AMZN.O rose
between 1.6% and 5%.
The energy index .SPNY was barely changed despite Exxon
Mobil Corp gaining 1.2% after announcing it would expand its
$30-billion share repurchase program. The sector had been under
pressure in recent sessions as commodity prices slipped: U.S.
crude CLc1 is now hovering near its level at the start of
2022.
Meanwhile, Moderna Inc MRNA.O advanced 2.3% after the U.S.
Food and Drug Administration authorized COVID-19 shots from the
vaccine maker that target both the original coronavirus and
Omicron sub-variants for use in children as young as six months
of age.
The regulator also approved similar guidance for fellow
COVID vaccine maker Pfizer Inc PFE.N , which rose 2.7%, and its
partner BioNTech, whose U.S.-listed shares BNTX.O gained 4.2%.
Rent the Runway Inc RENT.O jumped 61% after the clothing
rental firm raised its 2022 revenue forecast.
(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)
((Shubham.Batra@thomsonreuters.com;))