[ad_1]
Michael M. Santiago
U.S. stocks on Thursday rose after economic data showed further moderation in inflationary pressures and signs of cooling in the resilient labor market.
By afternoon, the Nasdaq Composite (COMP.IND) had surged 1.54% to 12,113.14 points, helped by a more than 3% jump in shares of Amazon (AMZN) as investors reacted favorably to the e-commerce giant’s annual CEO letter and its new tools to be used for artificial intelligence. The tech-heavy index was on track to snap a three-day losing streak. It has posted losses in six of its past seven sessions.
The benchmark S&P 500 (SP500) was higher by 0.87% to 4,127.39 points, while the blue-chip Dow (DJI) advanced 0.69% to 33,879.82 points.
Of the 11 S&P sectors, seven were trading in the green, led by heavyweight sectors Communication Services, Consumer Discretionary and Technology. Utilities and Real Estate topped the losers.
Earlier in the day, March producer price index unexpectedly slipped 0.5% M/M versus a projected increase of 0.1%. On a Y/Y basis, PPI came in at +2.7% compared to a consensus of +3.0%. The softer-than-expected report follows a moderation in the headline March consumer price index number released on Wednesday. The data overall points to continued disinflation and bolstered expectations that the Federal Reserve would consider pausing its rate-hiking campaign.
Adding to those hopes was data that showed the number of Americans filing for jobless claims rose the past week, suggesting cooling in what has been a highly resilient labor market.
“Initial claims for the week ending April 8 increased 11,000 to 239,000. After the revisions to seasonal factors, initial claims moved up between January and March, and last week’s claims figures are in the middle of the range that has prevailed since late February. So, the level of claims is noticeably above the 2022 average, though the upward momentum since the start of the year seems to have moderated recently,” JPMorgan’s Michael Feroli said in a note.
“The March PPI came in well below expectations, with the headline declining 0.5%, the biggest monthly decline since early 2020, pulled down by a 6.4% decline in energy prices,” Feroli added.
According to the CME FedWatch tool, markets are now pricing in a nearly 67% probability of a 25 basis point hike at the Fed’s monetary policy committee meeting in May.
Turning to the fixed income markets, the longer-end 10-year yield (US10Y) was flat at 3.42%, while the more rate-sensitive 2-year yield (US2Y) was lower by 3 basis points to 3.94%.
Also in focus on Thursday was the first quarter earnings season. Major U.S. carrier Delta Air Lines (DAL) posted a mixed report but provided optimistic guidance. Big banks including JPMorgan (JPM) and Citigroup (C) along with health insurance giant UnitedHealth (UNH) are on tap to announce their results on Friday.
Among active movers, Enphase Energy (ENPH) and SolarEdge Technologies (SEDG) were the top two percentage gainers on the S&P 500 (SP500) after favorable comments from Deutsche Bank, which named the former as its top pick among solar stocks.
Meanwhile, Progressive (PGR) was the top S&P percentage loser after posting an earnings miss.
[ad_2]
