NEW YORK (Reuters) – The S&P 500 and Nasdaq advanced on Thursday, as gains in heavyweight tech stocks outweighed downbeat data that affirmed the Federal Reserve’s view of a difficult road to economic recovery.
Gains in Apple Inc – the only publicly listed U.S. company to cross the $2 trillion market value milestone – Amazon.com Inc and Microsoft Corp underpinned the three main indexes’ gains as investors bet they would ride out the economic crisis.
Stocks had opened lower after data showed jobless claims rose unexpectedly back above the 1 million mark last week after slipping below that level for the first time since the start of the pandemic.
A separate set of data from the Philadelphia Fed showed a business conditions index fell more than expected in August.
“It’s a little disconcerting to get over the 1 million mark in jobless claims, but this just indicates that it’s not going to be a straight line recovery,” said Sam Stovall, chief investment strategist at CFRA Research in New York.
Overall, he added, “The underlying fundamentals remain strong and we are recovering from the pandemic.”
The volatility in jobless claims followed the lapse of an extra $600 weekly unemployment benefit at the end of July and came as Democrats in Congress have failed to reach an agreement with the White House on extending it.
Despite signs that parts of the economy are still far away from pre-pandemic levels, the benchmark S&P 500 index completed its fastest recovery from a bear market this week, joining the Nasdaq in scaling new peaks. It also confirmed a bull market for the S&P 500.
The S&P 500 and Nasdaq retreated from record levels on Wednesday after minutes from the Fed’s latest policy meeting gave a somber assessment of the U.S. economy as it grapples with the pandemic, but ruled out, for now, more dovish easing policy measures.
In mid-afternoon trading, the Dow Jones Industrial Average was up 0.04% at 27,702.84 points, while the S&P 500 gained 0.12% to 3,379.02.
The Nasdaq Composite added 0.72% to 11,227.24.
CFRA’s Stovall said that historically, stock bull markets on average have lasted 37 months.
Economically sensitive financial and energy sectors were some of the biggest percentage losers among the major S&P sectors.
Nvidia Corp edged higher after posting better than expected quarterly sales forecast.
Intel Corp rose 1.4% after announcing a $10 billion share buyback plan.
L Brands Inc rose 4.2% after reporting a surprise quarterly profit, boosted by strong demand for Bath & Body Works’ products as well as higher online sales of Victoria’s Secret lingerie.
Declining issues outnumbered advancing ones on the NYSE by a 1.70-to-1 ratio; on Nasdaq, a 1.79-to-1 ratio favored decliners.
The S&P 500 posted 13 new 52-week highs and no new lows; the Nasdaq Composite recorded 59 new highs and 24 new lows.
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