Stocks Snap 3-Day Losing Streak; Bitcoin Rebounds
21 May 2021 - 7:15AM
Dow Jones News
By Caitlin Ostroff and Julia Carpenter
U.S. stocks rebounded Thursday after jobless claims data showed
that the labor market continued to recover, helping major indexes
snap a three-day losing streak.
Fresh data showed that 444,000 Americans applied for first-time
unemployment benefits in the week ended May 15, down from 478,000
in the week prior. That is the lowest level since the pandemic hit
in mid-March 2020.
Stocks and other risky assets had been under pressure this week
following concerns that rising inflation and a speedy economic
recovery could prompt central bankers to pare back easy-money
policies.
"I think people are still concerned by the volatile moves that
we're having in our market," said Jonathan Corpina, senior managing
partner at Meridian Equity Partners. "In reality, people are still
apprehensive about what the economy will look like one month from
now, two months from now, six months from now."
The S&P 500 edged up 43.44 points, or 1.1%, to 4159.12,
while the Dow Jones Industrial Average gained 188.11 points, or
0.6%, to 34084.15. The technology-heavy Nasdaq Composite added 236
points, or 1.8%, to 13535.74.
After Thursday's rebound, the S&P 500 and Dow are off less
than 2% from the records they set two weeks ago. The Nasdaq is down
4.3% from its late April high.
"Traders and investors, at least at the margin, are coming in
and taking advantage of this selloff," said Quincy Krosby,
investment chief market strategist for Prudential Financial. "We'll
see how enduring that is."
The technology and communication services sectors led the way in
the S&P 500, both rising more than 1.6%. Stocks in those
sectors have been particularly sensitive to worries about rising
interest rates, in part because their earnings are expected to come
further in the future. Rising yields increase the value of current
earnings relative to future ones.
Of the S&P 500's 11 sectors, only energy finished the day in
the red.
Markets are likely to be volatile until additional economic data
provides a clearer picture, said Seema Shah, chief strategist at
Principal Global Advisors. "I don't think we could know anything
really about which way inflation is going to go until September,
but the market is unable to wait that long."
Bitcoin rose 5.1% to $40,341 following a frenzied selloff
Wednesday that saw cryptocurrencies plunge. Ether rose 11% to
$2,804, and dogecoin gained 15% to trade at roughly 40 cents.
"[Cryptocurrency] is no longer an asterisk for the general
market," Ms. Krosby said. "It seems like it's becoming very much
part of the general market, and questions whether or not the
selloff in bitcoin is representative of concerns over risk-on
risk-off over the larger market."
The continued retail struggle could signal a temporary change in
consumer behavior as the vaccine rollout continues, Ms. Krosby
said. Shares of Ralph Lauren dropped 7%, while Gap and L Brands
each fell about 4%.
"I think you're seeing the consumer using their freedom:
traveling, dining out, using their pent-up money," she said. "But I
think when consumers go back to work, you'll see them wanting more
clothing and new outfits and going to stores."
Shares of Virgin Galactic Holdings rose 15% after the aerospace
and space-travel company confirmed that the next test flight of its
SpaceShipTwo Unity will be conducted Saturday, pending weather and
technical checks.
In bond markets, the yield on 10-year Treasury notes fell to
1.631%, down from 1.680% Wednesday. Yields fall when bond prices
rise.
Overseas, the pan-continental Stoxx Europe 600 ticked up 1.3%.
The major Asian indexes closed on a mixed note. China's Shanghai
Composite Index edged 0.1% lower, South Korea's Kospi fell 0.3% and
Hong Kong's Hang Seng declined 0.5%. Japan's Nikkei 225 advanced
0.2%.
Write to Caitlin Ostroff at caitlin.ostroff@wsj.com and Julia
Carpenter at Julia.Carpenter@wsj.com
(END) Dow Jones Newswires
May 20, 2021 17:00 ET (21:00 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
Virgin Galactic (NYSE:SPCE)
Historical Stock Chart
From Apr 2024 to May 2024
Virgin Galactic (NYSE:SPCE)
Historical Stock Chart
From May 2023 to May 2024