Dow Keeps Winning Streak Alive on Late Buying Amid Reopening Optimism

This post was originally published on this site – The Dow notched its fourth-straight day of gains Thursday after cutting losses into the close as data showing the labor market is taking longer to bounce back from the pandemic impact did little to cool reopening optimism.

The Dow Jones Industrial Average rose 0.05%, or 12 points, the S&P 500 fell 0.34%, while the Nasdaq Composite slipped 0.69%.

The number of Americans filing for unemployment benefits continues to decline, but a deeper look into the data suggests that hopes the jobs market had bottomed may have been somewhat optimistic.

Initial jobless claims fell to 1.877 million for the week ended May 29, from 2.1 million the prior week, but missed forecasts of 1.8 million, Continuing jobless claims, however, unexpectedly rose to 21.5 million from 20.8 million the prior week, the Labor Department said Thursday,   

Many have been expecting the job situation to “stabilize and snapback in June, but the sticky high level of initial claims, elevated continuing claims, and the rise in claims for the Pandemic Assistance Program program suggest that even June might be too early for the expected turnaround,” Jefferies (NYSE:JEF) said in a note.

Sectors sensitive to the economic recovery, such as financials and industrials, remained well supported, sidestepping the broader market decline.

The optimism over the progress on reopening the economy has been underscored in the bond market, which for weeks had been signaling that the surge in appetite for risk had been overdone.

The yield on the United States 10-Year rose above 0.80% to a more-than-two-month high, helping banks catch a bid. Citigroup (NYSE:C), Bank of America (NYSE:BAC), and Wells Fargo (NYSE:WFC) continued to climb, with latter up more than 4%.

Sentiment on the aviation sector improved, meanwhile, after American Airlines (NASDAQ:AAL) said it plans to fly 55% of its domestic schedule in July, up from May when the airline flew just 20% of its capacity from a year ago, sending its shares up 44%.

But technology lagged the rally, with investors seemingly wary of frothy valuations on display following the sector’s surge since the lows seen in March.

Facebook (NASDAQ:FB), Apple (NASDAQ:AAPL), (NASDAQ:AMZN), Netflix (NASDAQ:NFLX) and Google-parent Alphabet (NASDAQ:GOOGL) traded below the flatline.

EBay (NASDAQ:EBAY), meanwhile, was up 6.3% after lifting its guidance for the second quarter.

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