US stocks rose significantly on Thursday, driven by encouraging jobless claims data that provided reassurance about the health of the American economy. The Dow Jones Industrial Average gained 268 points, or 0.7%, the S&P 500 climbed 54 points, or 1%, and the NASDAQ Composite surged 200 points, or 1.2% at 09:35 ET (13:35 GMT).
Key Takeaways
US Stocks Rise: US stock indices, including the Dow Jones Industrial Average, S&P 500, and NASDAQ Composite, showed significant gains on Thursday, driven by positive jobless claims data.
Jobless Claims Data: The number of Americans filing new applications for unemployment benefits fell to 233,000 for the week ending August 3, below the expected 241,000, reducing fears of a sharp economic slowdown.
Corporate Earnings: Positive earnings reports from companies like Eli Lilly, which saw a 10% stock increase, contributed to market optimism, while Bumble and Warner Bros Discovery faced significant stock declines due to less favorable earnings reports.
Jobless Claims Data Brings Optimism to US Markets
Jobless Claims Data
The number of Americans filing new applications for unemployment benefits fell to 233,000 for the week ending August 3.
This figure was lower than the expected 241,000 and represented a decrease from the revised 250,000 the prior week, which was an 11-month high. This positive data eased fears of a sharp slowdown in economic activity and boosted investor confidence.
Market Reaction
The jobless claims data alleviated concerns about a potential recession that had been fueled by recent weak labor market and business activity readings. JPMorgan raised the odds of a US recession by the end of this year to 35% from 25%, citing easing labor market pressures. The positive jobless claims report helped stabilize the markets, leading to significant gains across major indices.
Key Earnings Reports
In the corporate earnings front, Eli Lilly (NYSE: LLY) saw its stock soar by 10% after raising its annual profit forecast, with its popular weight-loss drug Zepbound crossing $1 billion in sales for the first time in a quarter. However, Bumble (NASDAQ: BMBL) experienced a 36% drop in its stock after the online dating agency cut its annual revenue growth forecast, raising concerns about its growth plans.
Additionally, Warner Bros Discovery (NASDAQ: WBD) stock fell by 8% after reporting a quarterly net loss of $10 billion, including a $9.1 billion write-down of its traditional television networks' value.
Crude Prices
Crude prices remained stable on Thursday, supported by solid US employment data despite dismal economic data from China. US crude futures (WTI) traded flat at $75.24 a barrel, while Brent crude slipped 0.2% to $78.17 a barrel.
The stability in crude prices was also aided by a significant draw in US crude inventories, which fell by 3.7 million barrels, marking a sixth straight weekly decline to six-month lows.
Conclusion
The latest jobless claims data provided a much-needed boost to the US stock market, calming recession fears and leading to significant gains across major indices. Investors will continue to monitor economic indicators and corporate earnings reports to gauge the health of the US economy and its potential impact on market performance.
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