U.S. Stocks Wobble as Unemployment Claims Drop
December 03 2020 - 10:02AM
Dow Jones News
By Anna Hirtenstein
Share benchmarks edged higher Thursday ahead of economic data
that will provide insights into the health of the services sector
and the labor market.
The S&P 500 opened with tepid gains of less than 0.1%, a day
after the broad-market index inched up to close at another all-time
high. The Nasdaq Composite Index edged 0.2% higher amid a muted
advance for tech stocks. The Dow Jones Industrial Average added 45
points, or 0.2%.
Trading has been choppy this week as November's explosive rally
in global stocks lost steam. The S&P 500 has repeatedly eked
out fresh records on the back of investors' optimism that Covid-19
vaccines will accelerate the economic rebound next year. But rich
valuations for stocks and elevated infection levels are tempering
some of that cheer, leading to a more subdued move upward in recent
days.
"Markets have been driving higher, seeing 2021 as the year
economies will snap back," said Peter Dixon, an economist at
Commerzbank. "There is concern a lot of the good news is already
priced in, so I don't expect markets to go shooting into the
stratosphere any time soon, but we could see a general grind
higher."
Ahead of the market open, Tesla gained almost 4%. A Goldman
Sachs analyst upgraded the stock's rating to buy and raised the
price target. Tesla will be added to the S&P 500 later this
month, which would prompt passive funds that track the index to add
the stock to their portfolios.
Data-analytics firm Splunk plunged over 21% in premarket trading
after its third-quarter revenue fell because customers pulled back
from large contracts. Its forecast also disappointed investors.
CrowdStrike, a cybersecurity software company, surged more than 12%
after its quarterly revenue increased.
In bond markets, the yield on the 10-year U.S. Treasury note
edged down to 0.931%, from 0.948% on Wednesday.
The dollar weakened against a basket of currencies, with the ICE
U.S. Dollar Index declining 0.4% to the lowest since April
2018.
Weekly jobless claims, seen as a proxy for layoffs, dropped to
712,000 for the week ended Nov. 28. That was lower than economists
had expected, reflecting a moderate improvement in the pace of
recovery of the labor market.
The results of surveys of purchasing managers in the services
sector, due to be released starting at 9:45 a.m. ET, will shed
light on a part of the economy that has been badly hit by the
pandemic.
Overseas, the pan-continental Stoxx Europe 600 ticked down 0.2%,
putting it on track for a muted drop this week. The gauge is
lagging behind major U.S. stock indexes, and is over 10% below the
record high it hit in February.
European regulators are expected to make a decision on approving
the use of coronavirus-vaccine candidates at the end of the month.
Speedier moves by the U.K. and the U.S. will give those nations an
edge, and could make their stocks more attractive, investors
said.
"Europe seems to be the laggard when it comes to vaccine
rollouts, it seems like it will take longer to approve," said
Shaniel Ramjee, a multiasset fund manager at Pictet Asset
Management. "And logistically, Europe is more fragmented and might
not be uniform."
In Asia, most major benchmarks ended the trading session
higher.
The Shanghai Composite Index edged down 0.2% by the close.
American lawmakers on Wednesday approved legislation that could
result in a trading ban on the shares of U.S.-listed Chinese
companies over concerns about their audit quality.
Write to Anna Hirtenstein at anna.hirtenstein@wsj.com
(END) Dow Jones Newswires
December 03, 2020 09:47 ET (14:47 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.