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S&P 500, Nasdaq extend record climb Thursday after weekly jobless claims report

U.S. stock benchmarks opened higher Thursday, with the S&P 500 index and the Nasdaq in record territory, as jobless benefit claims data showed further slight improvement in the labor market ahead of the August employment report on Friday.

What are U.S. futures indicating?

  • The Dow Jones Industrial Average was trading 114 points, or 0.3%, higher at 35,427.

  • The S&P 500 was gaining 17 points, or 0.4%, to reach 4,540.45, following an intraday all-time high at 4,545.85.

  • Nasdaq Composite Index trades 57 points, or 0.4%, higher at 15,365, after setting an intraday record at 15,380.07.

The Dow
DJIA,
+0.25%

fell 48 points on Wednesday to close at 35,312, while the S&P 500
SPX,
+0.29%

held on to end just above flat and the Nasdaq Composite
COMP,
+0.30%

outperformed, rising 0.3%.

What’s driving markets?

Initial jobless benefit claims in the states dropped by 14,000 to 340,000 in the week ended Aug. 28, the Labor Department reported Thursday.

Still, investors are watching for Friday’s August employment report which will give markets their next chance to guess how and when the U.S. Federal Reserve will begin slowing, or tapering, its program of monthly bond purchases. 

“We expect jobless claims to remain on a downward path, but there may be some interruptions if businesses and workers become more cautious because of the renewed spread of the coronavirus from the Delta variant,” wrote Oxford Economics’ economists Nancy Vanden Houten and Gregor Daco, in a research note.

Federal Reserve Chairman Jerome Powell has signaled that the central bank would be watching employment data as it mulls the end of its pandemic-era measures to add liquidity to markets.

Also read: Fed chair Powell says he supports starting to taper bond purchases this year

On Wednesday, weak numbers from payroll provider ADP’s private-sector employment report and the Institute for Supply Management’s measure of factory jobs underscored the room the U.S. economy still has to grow in terms of employment.

“Not a great indicator for Friday’s nonfarm payrolls and this would potentially give the Fed more rope to delay the taper,” said Neil Wilson, an analyst at Markets.com, in a daily research note.

“If data keeps getting worse, or less good, rather, then you can see the FOMC start to voice concerns at the [September] meeting and we could be in a position where the US central bank actually doesn’t taper asset purchases this year,” Wilson wrote.  

“I still think they will, but this is a very dovish, somewhat politically motivated Fed with jobs on its mind and Powell looking to keep his job,” the analysts wrote.

Meanwhile, data on the U.S. international trade deficit showed a decline of 4.3% in July to $70.1 billion, an updated reading of U.S. productivity growth in second quarter was raised to 2.1% from 2.3%. A report on factory orders is due at 10 a.m. Eastern Time.

Which companies are in focus
  • Shares of Toro Co. TTC rose 0.6% in premarket trading Thursday, after the lawn care equipment company reported fiscal third-quarter profit and sales that rose above expectations, as strength in the residential business helped offset a miss in professional, and raised its full-year outlook as strong demand was expected to offset continued supply chain, inflation and labor pressures.

  • Shares of Nikola CorpNKLA ran up 4.6% in premarket trading Thursday, after the electric commercial truck maker announced agreements with the Germany-based Bosch Group of companies for Nikola Class 7 and Class 8 fuel-cell electric vehicles (FCEVs). 

  • Manulife Financial Corp. MFC said Thursday its Hancock Natural Resource Group unit closed its acquisition of 300,000 acres of pine timberland on behalf of the Swedish pension system fund AP3. 

  • Shares of American Eagle Outfitters Inc. AEO tumbled 8.8% toward a more than five-month low, after the fashion apparel and accessories retailer reported fiscal second-quarter profit that beat expectations but revenue that rose to a record but came up shy of forecasts. 

  • Shares of Mastercraft Boat Holdings IncMCFT ran up 4.9% in premarket trading Thursday, after the recreational powerboat company swung to a fiscal fourth-quarter profit that was well above expectations, as sales tripled to a record, and provided an upbeat full-year outlook.

  • Baxter International IncBAX said Thursday it has entered an agreement to acquire fellow medical technology company Hill-Rom Holdings Inc. for $156 a share, in a deal with an enterprise value of about $12.4 billion.

  • Shares of Hormel Foods Corp. HRL sank 4.6% in premarket trading Thursday, after the branded foods company, which brands include Planters, Skippy and Spam, reported fiscal third-quarter profit that matched expectations, while record revenue beat, but cut its full-year earnings guidance, as the company managed through inflationary pressure and labor availability challenges.

  • Facebook‘s FB WhatsApp was fined €225 million ($267 million) by Ireland’s Data Protection Commission for breaking data protection rules.

  • Shares of Signet Jewelers LtdSIG shot up 4.2% in premarket trading toward the highest price seen during regular-sessions hours since January 2017, after the diamond jewelry retailer swung to a fiscal second-quarter profit that was more than double what was expected, as revenue also beat forecasts, and raised its full-year outlook.

How are other assets faring?
  • The 10-year Treasury note yields
    TMUBMUSD10Y,
    1.294%

    around 1.292%, versus 1.301% on Wednesday.

  • In Asia, Tokyo’s Nikkei 225
    NIK,
    +0.33%

    climbed 0.3% while the Hong Kong Hang Seng Index
    HSI,
    +0.24%

    lifted 0.2% and the Shanghai Composite
    SHCOMP,
    +0.84%

    pushed 0.8% higher

  • In Europe, London’s FTSE 100
    UKX,
    +0.04%

    was just below flat, while the pan-European Stoxx 600
    SXXP,
    +0.24%

    rose 0.2%; in Paris, the CAC 40
    PX1,
    +0.11%

    increased 0.1% while Frankfurt’s DAX
    DAX,
    +0.01%

    moved 0.1% into the green

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