S&P 500 Reaches New Record Closing High Ahead Of Monthly Jobs Data

Stocks turned in a mixed performance for a large chunk of the trading session on Thursday but managed to close mostly higher. With the upward move on the day, the S&P 500 reached another new record closing high.

The major averages all closed in positive territory, although the tech-heavy Nasdaq inched up just 18.42 points or 0.1 percent to 14,522.38. The Dow rose 131.02 points or 0.4 percent to 34,633.53 and the S&P 500 climbed 22.44 points or 0.5 percent to 4,319.94.

The higher close on Wall Street came ahead of the release of the Labor Department’s closely watched monthly employment report on Friday.

Economists currently expect the report to show employment jumped by 690,000 jobs in June after surging up by 559,000 jobs in May. The unemployment rate is expected to dip to 5.7 percent from 5.8 percent.

A day ahead of the release of the monthly jobs report, the Labor Department released a report showing first-time claims for U.S. unemployment benefits fell by more than expected in the week ended June 26th.

The report said initial jobless claims slid to 364,000, a decrease of 51,000 from the previous week’s revised level of 415,000.

Economist had expected jobless claims to dip to 393,000 from the 411,000 originally reported for the previous week.

With the bigger than expected decrease, jobless claims fell to their lowest level since hitting 256,000 in the week ended March 14, 2020.

Meanwhile, a separate report released by the Institute for Supply Management showed a modest slowdown in the pace of growth in U.S. manufacturing activity in the month of June.

The ISM said its manufacturing PMI slipped to 60.6 in June from 61.2 in May, although a reading above 50 still indicates growth in the manufacturing sector. Economists had expected the index to edge down to 61.0.

The Commerce Department also released a report showing an unexpected decrease in construction spending in the month of May.

Sector News

Energy stocks showed a substantial move to the upside on the day, benefiting from a sharp increase by the price of crude oil. Crude for August delivery spiked $1.76 to $75.23 a barrel.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index surged up by 3.7 percent and the NYSE Arca Oil Index jumped by 2.2 percent.

Significant strength also emerged among airline stocks, as reflected by the 1.4 percent gain posted by the NYSE Arca Airline Index.

Housing stocks also turned in a strong performance on the day, resulting in a 1.2 percent advance by the Philadelphia Housing Sector Index.

On the other hand, semiconductor stocks came under pressure over the course of the session, dragging the Philadelphia Semiconductor Index down by 1.5 percent. The index pulled back further off Tuesday’s record closing high.

Micron Technology (MU) helped lead the sector lower despite reporting better than expected quarterly results and provided upbeat guidance.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index fell by 0.3 percent, while China’s Shanghai Composite Index edged down by 0.1 percent.

Meanwhile, the major European markets moved to the upside on the day. While the U.K.’s FTSE 100 Index jumped by 1.3 percent, the French CAC 40 Index advanced by 0.7 percent and the German DAX Index rose by 0.5 percent.

In the bond market, treasuries gave back ground after yesterday’s advance. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 3.7 basis points to 1.480 percent after ending the previous session at its lowest closing level in nearly four months.

Looking Ahead

Trading on Friday is likely to be driven by reaction to the monthly jobs report, which will overshadow separate reports on the U.S. trade deficit and factory orders.

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