The stock market gained Thursday after jobless claims rose and the S&P 500 took a breather from five consecutive days of losses. Meme stock GameStop soared 9% after reporting a quarterly decline in sales but a narrower loss vs. a year ago.
The Nasdaq composite rose 1.1% while the S&P 500 gained 0.7%. The Dow Jones Industrial Average rose 0.6%. The small-cap Russell 2000 index rose 0.9% by midday.
Volume rose on the NYSE but fell on the Nasdaq vs. the same time on Wednesday.
The yield on the benchmark 10-year Treasury note fell 4 basis points to 3.47%. Crude oil prices rose 0.7% to $72.56 per barrel.
The Innovator IBD 50 ETF gained 0.3%, helped by oil stocks and by a 4.8% jump by beverage maker Celsius Holdings. CELH is close to its 118.29 buy point off a cup base.
Stock Market Gains On Jobless Claims Rise
First-time unemployment claims rose to 230,000 vs. 225,000 in the prior week, above the 228,000 consensus estimate. However, the fact that jobless claims remain low is a sign the labor market remains tight.
"Continued claims are low but rising fast, up 28% over the last half year," said Bill Adams, chief economist for Comerica Bank. "Every time continued claims grew this fast since comparable data started in 1967, it coincided with a recession. Comerica forecasts for real GDP to contract slightly in 2023 and for the unemployment rate to average 4.6% in the fourth quarter of next year."
Next week the Fed is meeting and is widely expected to raise rates by a half of a percentage point.
The probability the Fed will raise rates by 0.5% next week is pegged at 74.7%, while odds for a 75-basis-point hike are 25.3%, according to the CME FedWatch tool.
In other action, the Hang Seng Index shot up 3.4% on reports that Hong Kong is considering scrapping its outdoor mask mandate. In mainland China however, the Shanghai Composite fell 0.1%, while in Japan the Nikkei 225 lost 0.4%.
In Europe, the FTSE 100 fell 0.2%, the German DAX was virtually unchanged and the French CAC 40 fell 0.2%.
Tesla Sags On Reports Of Reduced Factory Shifts In China
Tesla stock dropped 2.1% after reports the company has shortened Shanghai factory shifts and delayed new hires due to slowing demand in the China auto market. However, Tesla quickly refuted those reports, saying the claims that it was cutting its Shanghai plant production by up to 20% were "untrue."
Tesla shares were already down more than 10% this week. Despite the losses, the stock is holding above its 52-week low set in mid-November.
Chevron shares retreated after popping more than 2%. By noon its shares were still up 0.7% as oil prices rebounded and after the company announced a 25% increase in its 2023 capital spending.
Exxon Mobil gained 1.2% on expanded earnings guidance, and after increasing its share repurchase program to $50 billion.
GameStop stock gained more than 9% after reporting a quarterly decline in sales and a narrower loss vs. a year ago. The former meme stock and video game retailer grew a trading fan base in late 2020. In January 2021, the stock shot up 1,625% to 81.25 and then crashed. With one brief exception, the stock has traded in the 20s since August.
Ciena shot up nearly 20% Thursday after reporting October-quarter profit and revenue that easily topped analyst estimates as supply chain problems eased. Management forecast fiscal 2023 revenue growth for the fiber optics stock in a range of 16% to 18%.
Stock Market Movers And Shakers
Dexcom's stock jumped Thursday after the Food and Drug Administration cleared its next-generation continuous glucose monitor for patients with diabetes. Dexcom stock popped 5% Thursday. That pushed shares past its 123.46 buy point out of a flat base, according to MarketSmith.com.
The body-worn G7 device is now available to people age 2 and older with type 1 or type 2 diabetes. It helps people with diabetes keep tabs on their blood glucose in real time.
Entrada Therapeutics jumped more than 17% after the biotech firm inked a $250 million deal with Vertex Pharmaceuticals to develop a muscular dystrophy drug.
JPMorgan Chase was up 0.5% after Piper Sandler analyst R. Scott Siefers initiated coverage of the stock with an buy rating and a 150 price target. Morgan Stanley upgraded JPM on Tuesday.
Costco, Lululemon and Broadcom are set to report earnings after the close today.
Shares of Costco have fallen below the 50-day line but remain in a cup-with-handle base with a buy point of 542.68. As of now there is no sell signal but investors should keep a look out for earnings. Wall Street predicts the wholesaler's earnings will climb 5% to $3.12 per share on 15% sales growth to $58.36 billion.
Follow Michael Molinski on Twitter @IMmolinski
