Optimism returned to Wall Street Thursday, as investors shrugged off mounting economic concerns and a warning from Microsoft to send stocks sharply higher. The advance revived sentiment that led to a major rebound last week, trimming losses After sale that has seen most of 2022 so far.
Wall Street saw bullish sentiment during most of pre-market trading, but suffered a setback after Microsoft issued watered-down guidance. The major averages rebounded from those early stumbles, though, and rose through most of the rest of the day, with the focus now on Friday’s jobs data.
The Nasdaq index rose 322.44 points to close at 12,316.90 points. The Dow Jones advanced by 435.05 points to close at 33248.28 points. The S&P 500 finished trading at 4176.82, up 75.59 points in the session.
Ten of the 11 sectors of the S&P 500 posted gains, led by a 2.9% rise in consumer appreciation. Communications and IT services and materials also increased by at least 2.4%. Power was the only constraint and even this segment registered only a partial drop.
Microsoft lowered fourth-quarter revenue and profit forecast due to Forex headwinds. Meanwhile, investors continued to debate the possibility of a recession and how best to play the Fed’s rate hike campaign.
“Although many macro commentators confuse stock market volatility with business cycle risk, the data has consistently disproved the near-term recession narrative,” writes Michael Darda of MKM.
“Once again, we need to free ourselves from the Pavlovian reaction function of the last cycle in which rates of change in macro-momentum indicators were closely correlated with risk/risk-off events with any continued tightening of financial conditions unwelcome by the central bank (the so-called The Fed), Aldar said. “This is the playbook when there is no growth (or low), no inflation (or low), and the Fed has failed to go down (not upside) on its inflation target. We’ve argued over and over for more than a year: market commentators who analyze the current background through the prism of the 2009-2019 cycle are, to put it mildly, “doing it wrong.”
Employment numbers dominated economic indicators this morning, a day before the May jobs report.
ADP jobs data in May showed a gain 128 thousand Against the consensus of 240K and the previous figure of 202K which was revised to 247K. Moreover, initial unemployment claims Decreased 11 thousand to 200 thousandcompared to the expected numbers of 210 thousand that were expected.
“The US job market remains strong,” said Gregory Daco, chief economist at EY Parthenon. “Initial claims for #unemployment benefits fell to 200,000 in late May, layoffs remain at record lows according to #JOLTS, and payroll gains are likely to be cooler but still strong in tomorrow’s #jobs report.”
Among active stocks, Hewlett Packard Enterprise was among the biggest losers after S&P Poor results and direction.
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