(RTTNews) – Stocks moved notably higher over the course of the trading day on Thursday, with the major averages all showing strong moves to the upside after showing a lack of direction early in the session. With the upward move, the S&P 500 ended the day at a new record closing high.
The major averages finished the day just off their highs of the session. The Nasdaq jumped 209.97 points or 1.0 percent to 21,707.69, the S&P 500 advanced 53.82 points or 0.8 percent to 6,502.08 and the Dow climbed 350.06 points or 0.8 percent to 45,621.29.
The strength that emerged on Wall Street came as traders digested the latest U.S. economic data, including a report from payroll processor ADP showing weaker than expected private sector job growth in the month of August.
ADP said private sector employment rose by 54,000 jobs in August after jumping by an upwardly revised 106,000 jobs in July.
Economists had expected private sector employment to rise by 65,000 jobs compared to the addition of 104,000 jobs originally reported for the previous month.
The Labor Department also released a report showing first-time claims for U.S. unemployment benefits rose by more than expected in the week ended August 30th.
The report said initial jobless claims climbed to 237,000, an increase of 8,000 from the previous week’s unrevised level of 229,000. Economists had expected jobless claims to inch up to 230,000.
With the bigger than expected increase, jobless claims reached their highest level since hitting a matching figure in the week ended June 21st.
While the reports add to recent signs of weakness in the labor market, the data has also increased confidence the Federal Reserve will lower interest rates later this month.
“We continue to see softness growing in the labor market as tariff policy uncertainty lingers, immigration changes take effect, and AI adoption grows,” said Eric Teal, Chief Investment Officer for Comerica Wealth Management.
He added, “The silver-lining is the weaker the jobs data the more cover there is for stimulative interest rate cuts that are on the horizon.”
CME Group’s FedWatch Tool is currently indicating a 99.4 percent chance the Fed will lower interest rates by 25 basis points at its September 16-17 meeting.
On Friday, the Labor Department is scheduled to release its more closely watched report on the employment situation in the month of August.
Economists currently expect employment to increase by 75,000 jobs in August after rising by 73,000 jobs in July, while the unemployment rate is expected to inch up to 4.3 percent from 4.2 percent.
Sector News
Computer hardware stocks moved sharply higher over the course of the session, driving the NYSE Arca Computer Hardware Index up by 3.5 percent to a record closing high.
Substantial strength was also visible among networking stocks, with the NYSE Arca Networking Index surging by 3.2 percent. The index also ended the day at a record closing high.
Ciena (CIEN) helped to lead the sector higher, soaring by 23.3 percent after reporting better than expected fiscal third quarter results.
Oil service, housing and retail stocks also saw significant strength on the day, while airline stocks came under considerable selling pressure as the day progressed.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan’s Nikkei 225 Index surged by 1.5 percent, while China’s Shanghai Composite Index slumped by 1.3 percent.
Meanwhile, European stocks moved mostly higher on the day. The German DAX Index climbed by 0.7 percent and the U.K.’s FTSE 100 Index rose by 0.4 percent, although the French CAC 40 Index bucked the uptrend and dipped by 0.3 percent.
In the bond market, treasuries moved to the upside, adding to the strong gains posted in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell 3.5 basis points to a four-month closing low of 4.176 percent.
Looking Ahead
Trading on Friday is likely to be driven by reaction to the monthly jobs report and its impact on the outlook for interest rates.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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