Investors welcomed positive signs that Congress would resolve the looming debt ceiling.
Samuel Corum/Getty ImagesThe stock market was rising Thursday, building on momentum from late gains on Wednesday, after a debt ceiling extension agreement was reached in Congress. Weekly jobless claims also painted an improving picture of the job market.
By midday, the Dow Jones Industrial Average was up 517 points, or 1.5%. The S&P 500 and Nasdaq Composite were rising 1.4 and 1.6%, respectively.
If the Dow closes above 34,916.88, it would be the index’s first close above its 50-day moving average since Sept. 8, after having closed below that level for 20 consecutive trading days. That is the longest such streak since a period between February and April of 2020.
Senate Majority Leader Chuck Schumer (D-N.Y.) said a deal between Republicans and Democrats had been reached to extend the government’s debt ceiling until December.
Now, the U.S. market is looking forward to the U.S. jobs report Friday, which measures nonfarm payrolls. Investors want to see that, as pandemic-related benefits expire, people are incentivized to go back to work.
Investors may have gotten an early read on the job market, as weekly initial jobless claims were 326,000, better than the expected 345,000 and lower than last week’s result of 364,000.
“A renewed decline this week keeps a longer-term downtrend in place,” wrote Citi economist Andrew Hollenhorst.
Friday’s employment report from the Bureau of Labor Statistics will make all the difference on the market’s view of the job market and economic recovery. Economists expect September payrolls to have increased by 500,000.
“The next two payroll reports are critical,” wrote Tom Graff, head of fixed-income at Brown Advisory. “During the first half of 2021, many blamed weak labor force participation on generous unemployment benefits. As of this payroll report, those have expired completely.”
Recently, better-than-expected economic data have provided quick boosts for stocks. In the summer, data had been disappointing, partly because of rising Covid-19 cases. Some had said markets need to see better data, which the market has gotten.
Overseas, Hong Kong’s Hang Seng rose 3.1%, led higher by shares in technology companies amid optimism that U.S.-China relations would soon thaw. The pan-European Stoxx 600 was 1.6% higher.
Russian President Vladimir Putin’s offer of help to “stabilize” the natural-gas market in Europe—where prices have surged around 500% this year—has calmed worries of an energy crisis in the region and helped cool commodity prices.
European natural-gas prices eased 10% Wednesday, declining again Thursday, while coal fell 10%.
Here are eight stocks on the move Thursday:
Industrial software company Aspen Technology (ticker: AZPN) stock rose 7.5% as manufacturer Emerson Electric (EMR) is considering merging its software business with Aspen.
Conagra Brands (CAG) stock was up 0.1% after the company reported a profit of 50 cents a share, beating estimates of 49 cents a share, on sales of $2.65 billion, above expectations for $2.53 billion.
Schlumberger (SLB) stock gained 3.3% after getting upgraded to Overweight from Neutral at JPMorgan.
Five Below (FIVE) stock rose 5.7% after getting upgraded to Overweight from Equal Weight at Morgan Stanley.
Square (SQ) jumped 4.3% after the payments group was upgraded to Buy from Hold by Jefferies, which assumed coverage of the company with a target price implying 25% upside to the stock.
Alibaba (BABA) rose 7.3% in Hong Kong with the U.S.-listed shares poised for a similar rally. Chinese tech stocks, like Tencent (0700.H.K.), which jumped 5.6% in Hong Kong, have been under pressure all year, but were boosted amid optimism that U.S.-China relations would improve. White House officials plan to schedule a meeting between President Joe Biden and President Xi Jinping in coming weeks, The Wall Street Journal reported.
Chinese Estates (0127.H.K.) rose 31.7% in Hong Kong after the former shareholder in embattled developer China Evergrande (3333.H.K.) revealed a $245 million take-private offer, representing a significant premium to the current stock price.
Write to Jacob Sonenshine at jacob.sonenshine@barrons.com
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