Stock market today: Wall Street rises ahead of a highly anticipated jobs report
By Stan Choe, The Associated Press on December 7, 2023.
NEW YORK (AP) – Wall Street closed higher following its first three-day losing streak since Halloween. The S&P 500 rose 0.8% Thursday and continued to hang near its highest level since March 2022. The Dow Jones Industrial Average rose 0.2%, and the Nasdaq composite added 1.4%. Big Tech pushed strongly upward on the market, led by a big gain for Google’s parent company, Alphabet. Treasury yields largely held steady after a report showed a slight uptick in the number of workers applying for unemployment. A potentially more impactful report on the job market will arrive Friday. THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below. NEW YORK (AP) – Wall Street is rising Thursday following its first three-day losing streak since Halloween. The S&P 500 was 0.7% higher in late trading and continuing to hang near its highest level since March 2022. The Dow Jones Industrial Average was up 62 points, or 0.2%, as of 3 p.m. Eastern time, and the Nasdaq composite was 1.2% higher. Big Tech stocks helped power the market higher, led by a 5.5% jump for Google’s parent company, Alphabet. They’re Wall Street’s most influential stocks because of their massive size, and they have been on huge tears so far this year. Cerevel Therapeutics also jumped 10.8% after AbbVie announced an $8.7 billion deal to buy the company and its pipeline of candidates for schizophrenia, Parkinson’s and other diseases. AbbVie added 0.9%. Much of Wall Street’s recent rally has been because of rising hopes that the Federal Reserve is finally done with its barrage of hikes to interest rates, which are meant to get high inflation under control. That has anticipation high ahead of a report on Friday, the U.S. government’s latest monthly update on the job market. The Federal Reserve wants to see the job market slow by just the right amount. Too much weakness would mean people out of work and a possible recession, but too much strength could add upward pressure on inflation. So far, anticipation is rising that the Federal Reserve can nail a perfect landing for the job market and overall economy. Inflation has been slowing since peaking two summers ago, and expectations are building that the Fed’s next move will be to cut interest rates next year. A report on Thursday said that slightly more U.S workers applied for unemployment benefits last week, though the number is not alarmingly high and hit economists’ expectations exactly. That had both stock and bond markets relatively calm and waiting for Friday’s report, which could be more impactful. The yield on the 10-year Treasury edged up to 4.13% from 4.12% late Wednesday. It’s been generally easing since topping 5% in October and hitting its highest level since 2007. The drop in the 10-year yield over the last month, including after accounting for inflation, is one of the reasons that strategists at Goldman Sachs say the S&P 500 looks like it’s trading “roughly in line with fair value,” even after its nearly 9% rip through November. Expectations for a healthy economy have also helped to boost stocks. But the path ahead could travel down one of several forks, depending in part on how quickly inflation continues to cool and whether the Fed does cut rates by as much as traders are expecting. Goldman Sachs says traders “are approaching the limits of what could plausibly” be expected for rate cuts without a recession hitting in the near term. “We believe much of the optimistic scenario is already reflected in US equity prices today,” the strategists led by Ryan Hammond wrote in a report. Since the Federal Reserve began its campaign early last year to drastically ramp up interest rates, traders have several times built up bets for an imminent halt to rate hikes and for potential cuts, only to be disappointed each time. While Federal Reserve officials have hinted recently their main interest rate may indeed be at a peak, some have said it’s too early to begin considering when cuts could come. Hopes for easier rates help all kinds of investments, particularly those seen as the most expensive or promising big growth the furthest in the future. That’s helped send Big Tech stocks to their huge gains this year. Alphabet’s jump on Thursday brought its gain for the year so far to just over 55%. A day earlier, it announced the launch of its Gemini artificial intelligence model. The announcement made few waves on Wall Street initially, and Alphabet’s stock slipped Wednesday, but analysts at JPMorgan said in a report they “are encouraged to see Google’s progress on this major technology shift.” Alphabet was the single strongest force pushing the S&P 500 upward, but Apple, Amazon and Nvidia all also rose at least 1%. Another winner was JetBlue Airways, which climbed 13.6% after it said it may report better results for the final three months of the year than it earlier expected. It also slightly lowered the top end of its forecast for fuel costs during the end of 2023. Crude oil prices have been falling recently amid worries about demand from the global economy falling short of the available supplies. A barrel of benchmark U.S. crude slipped another 4 cents to settle at $69.34. It’s down from $93 in late September. Brent crude, the international standard, fell 25 cents to $74.05 per barrel. On the losing end of Wall Street, C3.ai tumbled 11.4% after reporting weaker revenue for the latest quarter than analysts expected. In stock markets abroad, the Nikkei 225 dropped 1.8% in Tokyo amid speculation about whether the Bank of Japan will ease off its ultra-easy policy on interest rates. Losses elsewhere in Asia and Europe were more modest. ___ AP Business Writers Matt Ott and Elaine Kurtenbach contributed. 27-26
