U.S. Stocks Edge Up as Unemployment Claims Drop
04 December 2020 - 2:52AM
Dow Jones News
By Anna Hirtenstein
U.S. stocks drifted higher Thursday as weekly jobless claims
declined and investors looked ahead to Friday's monthly jobs
report.
The S&P 500 edged up 0.2% a day after the broad-market index
closed at another all-time high. The Dow Jones Industrial Average
added 122 points, or 0.4%. The Nasdaq Composite rose 0.6%.
The S&P 500 has repeatedly eked out fresh records on the
back of investors' optimism that Covid-19 vaccines will accelerate
the economic rebound next year. But rich valuations for stocks and
elevated infection levels are tempering some of that cheer, leading
to a more subdued move upward in recent days.
Weekly jobless claims, seen as a proxy for layoffs, dropped to
712,000 for the week ended Nov. 28. That was lower than economists
had expected, reflecting a moderate improvement in the pace of
recovery of the labor market. The monthly jobs report will be
released on Friday.
Meanwhile, activity in the U.S. services sector expanded for the
sixth straight month in November, a sign that activity held up
despite the rise in Covid-19 cases, IHS Markit data showed
Thursday.
"Markets have been driving higher, seeing 2021 as the year
economies will snap back," said Peter Dixon, an economist at
Commerzbank. "There is concern a lot of the good news is already
priced in, so I don't expect markets to go shooting into the
stratosphere any time soon, but we could see a general grind
higher."
Tesla gained about 3% in early trading after Goldman Sachs
upgraded the stock's rating to buy and raised the price target to
$780. That's about a 37% jump from $568.82, where the stock closed
on Wednesday. Tesla will be added to the S&P 500 later this
month, which would prompt passive funds that track the index to add
the stock to their portfolios.
Data-analytics firm Splunk plunged 23% after its third-quarter
revenue fell because customers pulled back from large contracts.
Its forecast also disappointed investors.
In bond markets, the yield on the 10-year U.S. Treasury note
edged down to 0.928%, from 0.948% on Wednesday.
The dollar weakened against a basket of currencies, with the ICE
U.S. Dollar Index declining 0.4% to the lowest since April
2018.
Overseas, the pan-continental Stoxx Europe 600 ticked down
0.1%.
European regulators are expected to make a decision on approving
the use of coronavirus-vaccine candidates at the end of the month.
Speedier moves by the U.K. and the U.S. will give those nations an
edge, and could make their stocks more attractive, investors
said.
"Europe seems to be the laggard when it comes to vaccine
rollouts, it seems like it will take longer to approve," said
Shaniel Ramjee, a multiasset fund manager at Pictet Asset
Management. "And logistically, Europe is more fragmented and might
not be uniform."
In Asia, most major benchmarks ended the trading session
higher.
The Shanghai Composite Index edged down 0.2% by the close.
American lawmakers on Wednesday approved legislation that could
result in a trading ban on the shares of U.S.-listed Chinese
companies over concerns about their audit quality.
Gunjan Banerji contributed to this article.
Write to Anna Hirtenstein at anna.hirtenstein@wsj.com
(END) Dow Jones Newswires
December 03, 2020 10:37 ET (15:37 GMT)
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