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S&P 500 climbs as investors eye upcoming jobs data

2023-04-06T18:30:50Z

Traders work on the trading floor at the New York Stock Exchange (NYSE) in New York City, U.S., March 31, 2023. REUTERS/Andrew Kelly

The S&P 500 and Nasdaq rose in choppy trade on Thursday, helped in part by a rally in Alphabet shares as investors awaited fresh jobs data following recent signs of a slowing economy.

Alphabet Inc (GOOGL.O) climbed 3.5% and Microsoft (MSFT.O) added 2.2%, both providing more fuel than any other stocks for the S&P 500’s gain for the session. Alphabet’s Google unit plans to add artificial intelligence features to its search engine, the Wall Street Journal reported.

Adding to recent data hinting at a weak labor market, initial jobless claims fell to a seasonally adjusted 228,000 for the week ended April 1, versus expectations of 200,000 claims.

The Labor Department’s data from the prior week was revised to show 48,000 more applications were received.

Wall Street has lost ground in recent days in reaction to signs of a slowing economy, including weak data on private payrolls and job openings earlier this week.

That marked a change from recent months, when investors cheered weak economic data on the basis that it might mean the Fed’s interest rate hikes were working and that the Fed could ease up on its campaign to rein in decades-high inflation.

Interest rate futures imply traders are divided about whether the Fed will raise its target rate or keep it steady at its upcoming May meeting, according to CME Group’s Fedwatch tool.

“The market is trying to decide whether the ‘growth and recession’ scare or the ‘Fed hiking’ scare are more meaningful to prices, and so it’s waffling between whether a softening labor market is good news because it gets the Fed to pause in May or bad news because it means the recession is actually coming,” said Ross Mayfield, an investment strategy analyst at Baird in Louisville, Kentucky.

Focus now shifts to the more comprehensive report on non-farm payrolls, which are expected to have increased by 239,000 in March, down from the 311,000 jobs added in the prior month. That report is due on Friday, when the U.S. stock market will be closed for the Good Friday holiday.

The S&P 500 and Nasdaq climbed in afternoon trading after opening the session with losses.

Even as the S&P 500 traded in positive territory, most of its components were down for the day, with declining stocks outnumbering rising ones (.AD.SPX) by a 1.3-to-one ratio.

The S&P 500 was up 0.31% at 4,103.20 points.

The Nasdaq gained 0.74% to 12,085.48 points, while the Dow Jones Industrial Average was up 0.01% at 33,486.93 points.

Of the 11 S&P 500 sector indexes, six declined, led lower by energy (.SPNY), down 0.85%, followed by a 0.47% loss in materials (.SPLRCM).

Big banks including JPMorgan Chase & Co (JPM.N) and Citigroup (C.N) will be among companies kicking off the quarterly reporting season next week, with investors eager for updates on the health of the sector after a recent banking crisis.

AMC Entertainment Holdings Inc (AMC.N) surged 26% after a U.S. court denied the theater operator’s request to lift a status quo order necessary for its plan to convert preferred shares to common shares.

Levi Strauss & Co (LEVI.N) dropped 15% after the apparel maker posted a fall in quarterly profit.

The S&P 500 posted six new highs and no new lows; the Nasdaq recorded 42 new highs and 150 new lows.

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