Stocks on Wall Street overcame a shaky start to close broadly higher Thursday, as the major indexes more than made up for their losses earlier in the holiday-shortened week.
The S&P 500 rose 1.8%, with more than 85% of the stocks in the benchmark index notching gains. The Dow Jones Industrial Average rose 1.3%, while the Nasdaq climbed 2.7%.
Technology stocks accounted fore a big share of the gains as Microsoft erased an early loss. Bond yields eased.
Trading has been choppy in recent days as investors remain worried about inflation and the interest rate increases the Federal Reserve is using to fight it. Thursday's market rally may have been spurred, in part, by a report showing private sector hiring that came in well below economists' forecasts.
“The private payroll report was pretty weak," said Tom Hainlin, national investment strategist at U.S. Bank Wealth Management. “It’s maybe one of those environments where people are looking for weak data that gives them some hope that the Fed will pause (rate hikes) in September.”
The S&P 500 rose 75.59 points to 4,176.82. The index has risen 7.1% since coming to the edge of a bear market two weeks ago.
The Dow added 435.05 points to 33,248.28, while the Nasdaq gained 322.44 points at 12,316.90.
Rising energy prices have been feeding inflation, which is already at its highest levels in four decades. U.S. gasoline prices hit another record high Thursday, with the average price at the pump costing $4.71 per gallon, according to motoring club federation AAA.
Investors remain focused on the balance between inflation, rising interest rates and economic growth. The Federal Reserve is being closely watched as it tries to temper the impact from inflation by raising interest rates from historic lows during the pandemic.
Several economic reports on Wednesday bolstered expectations for the Fed to keep raising interest rates aggressively. Wall Street is concerned that the Fed could slow economic growth too much and potentially send the economy into a recession.
But on Thursday, payroll processor ADP reported that hiring by private U.S. companies rose just 128,000 in May. That's well below the 302,000 hires economists expected, according to FactSet.
Wall Street will get another glimpse into the health of the broader economy on Friday when the Labor Department releases its employment report for May. The jobs market had initially been slow to recover from the impact of the virus pandemic, but has bounced back strongly with low unemployment and plentiful job postings.
Technology stocks, whose lofty values tend to give the broader market a harder push higher or lower, accounted for a big share of the rally Thursday. Chipmaker Nvidia jumped 6.9% and software maker Adobe rose 5.5%.
Communications stocks, companies that rely on direct consumer spending and some big industrial firms gained ground. Facebook parent Meta Platforms rose 5.4%, Expedia Group added 6.3% and Boeing climbed 7.5%.
Small company stocks rose, signaling confidence about economic growth. The Russell 2000 gained 42.85 points, or 2.3%, to 1,897.67.
Bond yields were relatively stable. The yield on the 10-year Treasury, which helps set interest rates on mortgages and other loans, fell to 2.91% from 2.93% from late Wednesday.
Energy stocks fell. Chevron slipped 0.2%.
Investors continue monitoring corporate earnings and financial updates. Microsoft rose 0.8%, recovering from an early slide, after cutting its financial forecasts for the current quarter. The software pioneer cited unfavorable changes in exchange rates. Online pet store Chewy surged 24.2% after reporting strong earnings.
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
Tesla, the car company run by Elon Musk, reported Wednesday that it sold more vehicles in the past three months after boycotts hit hard earlier this year, but profits still fell sharply. Third-quarter earnings fell to $1.4 billion, from $2.2 billion a year earlier. Excluding charges, per share profit of 50 cents came in below analysts' estimate. Tesla shares fell 3.5% in after-hours trading. Musk said the company's robotaxi service, which is available in Austin, Texas, and San Francisco, will roll out to as many as 10 other metro areas by the end of the year.
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