(Reuters) – A rally in tech shares drove the Nasdaq index higher on Thursday, with weekly jobless claims dipping below 2 million for the first time since mid-March bolstering optimism around an economic rebound from the coronavirus-driven slump.
FILE PHOTO: Traders wear masks as they work on the floor of the New York Stock Exchange as the outbreak of the coronavirus disease (COVID-19) continues in the Manhattan borough of New York, U.S., May 27, 2020. REUTERS/Lucas Jackson
The NYSE FANG+TM Index, which includes Facebook Inc, Apple, Amazon.com Inc, Netflix and Alphabet Inc, hit an intraday record high in morning trading.
But the S&P 500 and the Dow Jones indexes pulled back slightly after gaining earlier this week.
“The market is due for a pause,” said Christopher Grisanti, chief equity strategist at MAI Capital Management in Cleveland, Ohio.
“It’s really important to realize that U.S. equity investors have been given a great gift in the middle of what is probably the deepest recession in 80 years,” he said, referring to the strong run for Wall Street since late-March.
Wall Street’s main indexes have recovered sharply from their March lows and the tech-heavy Nasdaq index is now only 1.3% away from surpassing its all-time closing high hit in February.
A report from the Labor Department showed new claims for state unemployment benefits totaled 1.877 million for the week ended May 30, down from 2.126 million in the prior week. Economists polled by Reuters had forecast 1.8 million initial claims in the latest week.
The focus will now shift to the closely watched employment report for May, due Friday, which is expected to show unemployment rate rocketing to 19.8%, a post-World War Two record.
At 9:57 a.m. ET the Dow Jones Industrial Average was down 13.07 points, or 0.05%, at 26,256.82, the S&P 500 was down 2.74 points, or 0.09%, at 3,120.13 and the Nasdaq Composite was up 21.04 points, or 0.22%, at 9,703.95.
American Airlines Group Inc jumped 11.0% after the airline revealed plans to fly more than 55% of its July 2019 domestic capacity and boost its U.S. flight schedule next month.
Jif peanut butter maker J.M. Smucker Co fell 2.3% after the company forecast a decline in full-year sales on weakness in sales to restaurants and schools.
Charles Schwab Corp gained 0.5% after it received an anti-trust approval from the Department of Justice for its purchase of TD Ameritrade Holding Corp. Shares of TD Ameritrade jumped 3.5%.
EBay Inc jumped 7.1% after it raised its current-quarter revenue and profit forecast, as people stuck at home ordered more from its platform due to the COVID-19 pandemic.
Declining issues outnumbered advancers more than 2-to-1 on the NYSE and nearly matched them on the Nasdaq.
The S&P index recorded eight new 52-week highs and no new low, while the Nasdaq recorded 29 new highs and one new low.
Reporting by Devik Jain and Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta and Uttaresh.V