Stocks finished higher Thursday as Wall Street clawed its way back from the markets' nosedive earlier in the week
The Dow Jones Industrial Average soared 683.04 points, or 1.76%, to end the session at 39,446.49, while the S&P 500 climbed 2.3% to close at 5,319.31 and posting its best day since November 2022. The tech-heavy Nasdaq gained 2.87% to finish the day at 16,660.02.
Some the companies that came bouncing back on Thursday included Nvidia, Broadcom, and Facebook parent Meta Platforms.
The latest weekly jobless claims came in below forecasts, which helped calm fears the labor market was unraveling
“Investors have to be careful not to read too much into one report like they did recently with the last payroll report,” Jeffrey Roach, chief economist for LPL Financial. “A holistic interpretation of the labor market is hiring will likely slow throughout the rest of the year, putting some downside risk to income growth.”
“If the data deteriorates quickly from here, the Fed could take more decisive action in September and cut by a half of a percent, which would provide some salve for markets.” he added.
Updated at 12:34 PM EDT
Bitcoin comeback
Bitcoin prices surged higher into the mid-day session, and are on pace for their biggest single-day gain in fifteen months, as investors returned to risk markets amid broader rally in domestic stocks.
Spot bitcoin prices were marked 8.4% higher on the day as $59,783.60 each, while the iShares Bitcoin Trust (IBIT) jumped 9.11% to $34.03 per unit.
$59K Bitcoin! 🚀🚀🚀 pic.twitter.com/us2RNN2dtp
— Neil Jacobs (@NeilJacobs) August 8, 2024
Updated at 10:38 AM EDT
Round trip
Stocks are building on this morning's early gains, thanks in part to further normalizing in Treasury bond yields, a better-than-expected reading for weekly jobless claims and another pullback in Wall Street's benchmark volatility gauge
The VIX was last marked 10.5% lower on the session at $25.04, well south of the four-year high of $60 is breached earlier this week.
The S&P 500 is now up 95 points on the session, or 1.82%, putting the benchmark within 40 points of its closing levels last Friday.
S&P 500 profit margins moved up to 12.1% in Q2, their highest level since Q4 2021.
— Charlie Bilello (@charliebilello) August 8, 2024
“Profit margins are probably the most mean-reverting series in finance, and if profit margins do not mean-revert, then something has gone badly wrong with capitalism.” – Jeremy Grantham pic.twitter.com/QWfIPPXG1w
Updated at 9:35 AM EDT
Green ... for now
The S&P 500 was marked 51 points, or 0.98% higher in the opening minutes of trading, with the Nasdaq rising 195 points, or 1.21% on the strength of renewed gains for megacap tech stocks.
The Dow, meanwhile, gained 226 points while the small-cap Russell 2000 rose 23 points, or 1.16%.
Today’s jobless claims data may ease some of the concerns raised by last week’s soft jobs report," said Chris Larkin, managing director for trading and investing at E*Trade from Morgan Stanley.
"But with inflation data due out next week and the stock market still working through its biggest pullback of the year, it’s unclear how much this will move the sentiment needle," he added.
S&P 500 Opening Bell Heatmap (Aug. 08, 2024)$SPY +1.07%🟩$QQQ +1.52% 🟩$DJI +0.55% 🟩$IWM +0.99% 🟩 pic.twitter.com/1kRXXpJlwS
— Wall St Engine (@wallstengine) August 8, 2024
Updated at 8:34 AM EDT
Jobs boost
Weekly jobless claims posted a surprise decline over the period ending on August 3, Labor Department data indicated, adding further complexity to the market's recession concerns.
Around 233,000 Americans filed for new jobless benefits last week, 17,000 fewer than during the prior period. Continued claims, which are reported on a one-week lag, rose modestly to 1.875 million.
Stocks turned higher following the data release, with futures tied to the S&P 500 suggesting a 30 point opening bell gain and those linked to the Nasdaq suggesting a 140 point advance.
Benchmark 10-year note yields jumped 4 basis points to 3.975%, while 2-year notes traded back above the 4% mark at 4.036%.
US weekly jobless claims came in at 233,000, down from a revised 250,000 -- a relief after last week's unemployment and growth scare.
— Mohamed A. El-Erian (@elerianm) August 8, 2024
The details of this data release will be subject to a higher level of scrutiny with a view to assessing breadth and other distributional aspects.… https://t.co/fBqaJVs3sM
Updated at 7:03 AM EDT
Weight gains via weight loss at Lilly
Eli Lilly (LLY) shares soared in early trading after the drugmaker posted stronger-than-expected second-quarter earnings and boosted its full-year profit forecast on the strength of its weight loss treatments.
Eli Lilly said combined quarterly sales of Zepbound and Mounjaro hit $3.83 billion, well ahead of Wall Street forecasts, and should rise to $15 billion by the end of the year.
Eli Lilly shares were marked 8.9% higher in premarket trading to indicate an opening bell price of $843 each.
📢🟢 Eli Lilly, $LLY, is UP 9.5% in the premarket, after reporting Q3 FY24:
— EarningsTime (@Earnings_Time) August 8, 2024
📊 Adj EPS: $3.92 🟢
💰 Revenue: $11.30B (+36% YoY) 🟢
📈 Net Income: $2.97B (+68% YoY)
🔍 Important Fact: Raised full-year revenue guidance by $3B
👇📄 pic.twitter.com/DDWvm5Xs9X
Stock Market Today
The recent surge in volatility, which lifted the market's benchmark VIX index to a four-year high earlier this week amid the reversal of so-called yen-carry trades in markets worldwide, hammered U.S. stocks again yesterday, which pulled the S&P 500 into a late-session decline that reversed solid earlier gains.
A weaker-than-expected auction of $42 billion in 10-year Treasury bond yields, which drew muted foreign demand, also suggested that investors remain fixated on the yen-trade unwinding and its impact on markets ranging from fixed income assets to global commodities.
The carry trade involves sophisticated investors borrowing money at near-zero rates in Japan, converting it to dollars and putting it to work for higher returns in markets elsewhere.
David Dee Delgado/Getty Images
However, with the Bank of Japan signaling interest rate hikes, and the Federal Reserve poised to lower its borrowing costs over the coming months, the window of opportunity for that trade has narrowed. That's resulted in a massive unwinding that has roiled global markets and wiped out more than $6 trillion in value over the past three weeks.
Related: Goldman Sachs analyst revisits S&P 500 target after market meltdown
JP Morgan analysts estimate most of the trades have been reversed, but they suggest around a quarter of the positions remain in place.
That could be while VIX levels, although in retreat, remain near the highest in two years, with the gauge last marked at $28.47 in after-hours trading.
At that level, traders are expecting daily swings of around 1.787%, or 92 points, for the S&P 500 each day over the next 30 days, more than double the indication at this time last month.
The market's secondary concern, that the U.S. economy is drifting into recession as a result of a weakened labor market, will also be in focus today with weekly jobless claims data expected at 8:30 am Eastern Time.
Benchmark 2-year Treasury note yields were trading at 3.935% heading into the start of the New York session, around 5 basis points south of yesterday's levels, while 10-year notes were marked at 3.912%.
The Treasury will also auction $25 billion in 30-year bonds later in the session.
Related: Mortgage rates tumble on bond market rally
Stocks are looking to a cautious open ahead of that data release, with futures contracts tied to the S&P 500 priced for a 22 point opening bell decline and the Dow Jones Industrial Average called 155 points lower.
The tech-focused Nasdaq, which is now down 8.7% for the quarter, is priced for another 55 point decline.
In overseas markets, the regional Stoxx 600 benchmark was down 1.12% in Frankfurt, after posting solid earlier gains, while Britain's FTSE 100 fell 1.05% after starting the London session firmly in the green.
More Wall Street Analysts:
- Analysts reboot Amazon stock price targets after earnings
- Analyst reboots Rivian stock price target on updated plans
- Analysts reboot Arm Holdings stock price target following earnings
Overnight in Asia, Japan's Nikkei 225 ended 0.74% lower on the session, while the yen strengthened to 146.09 against the U.S. dollar, suggesting more carry-trade unwinding.
The regionwide MSCI ex-Japan benchmark, meanwhile, slipped 0.39% into the close of trading.
Related: Veteran fund manager sees world of pain coming for stocks
