S&P 500 climbs to record after better-than-expected jobless claims, Dow climbs 150 points

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The S&P 500 hit an all-time high on Thursday after weekly jobless claims turned out slightly better than expected.

The broad equity benchmark gained 0.4% and reached an all-time high with its 54th record closing high in 2021. The Dow Jones Industrial Average rose 150 points, boosted by Apple and Chevron. The technology-heavy Nasdaq Composite gained 0.4% and also hit a record.

Initial jobless claims totaled 340,000 for the week ended August 28, up from a Dow Jones estimate of 345,000. The number is also the lowest since March 2020 at the start of the Covid crisis.

The data came a day before August’s major job report, which investors are watching closely to see how quickly the Federal Reserve will lift its loose monetary policy. Economists estimate 720,000 new jobs were created in the month, up from 943,000 in July.

“With unemployment claims reaching a pandemic low, there is definitely some optimism as we look at the bigger picture of jobs tomorrow,” said Mike Loewengart, managing director of investment strategy at E-Trade. “We could pull and pull a little – on the one hand, a solid labor market report is a positive indicator of economic recovery, and on the other, it supports the Fed’s arguments to start cutting.”

Fed chairman Jerome Powell has emphasized the need for stronger employment data before the central bank begins to wind down its massive bond-buying program and has put more focus on Friday’s employment report.

Chewy and Five Below were among the notable movers on Thursday, with stocks falling 9% and 8%, respectively, following the release of quarterly results. Stocks of ChargePoint, the maker of charging systems for electric vehicles, rose 12% after reporting excellent quarterly results.

Wall Street began September trading with subdued action on Wednesday as the S&P 500 closed near the flat line. The Nasdaq Composite rose 0.3% to hit a record.

Although September was one of the seasonally weakest months of the year, many view the market constructively as the tech backdrop remains solid and post-pandemic economic reopening continues.

“The relentless uptrend amid low volatility in US equities continues, and with breadth, volume positioning and sentiment all in our view positive, we expect the rally to extend to new highs,” Credit Suisse said on Wednesday in a message.