Wall Street is mixed due to a higher-than-expected weekly jobless climate report

Wall Street

Wall Street is mixed due to a higher-than-expected weekly jobless climate report.

Wall Street edged lower due to a higher-than-expected weekly job claims report. The S&P was nearing a total of 5000 bps. Yet the increases in layoffs, including weekly job claims, harmed the market.

On Thursday morning, the Labor Department reported that unemployment rates rose slightly in the last week of January. The increase in its rate was due to a high layoff week, particularly for tech giants. The report came in one week after the Federal Reserve decided that they would not cut any interest rates this month. Still, due to the rising numbers of weekly jobless Californians, the probability of interest rate cuts has just increased, and they are likely to occur sooner than expected. However, while resilience is at its best, this also might suggest a decline in interest rates. Till now, it’s only a market estimation, and nothing has been confirmed yet.

Below are some of the key features of what the labor department has reported:

  • Weekly unemployment claims show no significant belt-tightening layoffs or cost-cutting, as reported in some company earnings.
  • Initial claims for state unemployment benefits dropped by 9,000 to 218,000 for the week ended Feb. 3.
  • Economists expected 220,000 claims, with little change compared to the same period last year.
  • Unadjusted claims fell by 31,192 to 232,727 last week, with notable declines in several states like California, Ohio, and New York, partially reversing the earlier surge.

Christopher Rupkey, chief economist at FWDBONDS in New York, commented on the released report and said, “The basic message from today’s report is that not only are there not enough job losses to point to a recession, there are no significant job losses to see at all.”

Meanwhile, by the end of the midday trading hours, Wall Street’s main three indexes were down. After hovering near the 5000 bps level, the S&P 500 benchmark was down by 0.1% to 4,991.30 bps. The tech-heavy Nasdaq composite was slightly higher by 0.17% to 15,785.20 bps. Keeping with tech stocks, despite the recent layoff movement in the technology sector, the overall index was 2.6%, reaching its first high for the first time since November 2021. The Dow Jones average index was down by 0.18% to 38.607,4 bps.

Moving to individual stocks and their performance in Thursday’s session;

NYCB (NYSE) is down 7.7% despite new leadership and potential real estate cuts.

Arm (unknown market) is up 38.7% on a strong AI chip demand forecast.

PYPL (NASDAQ) is down 9.4% despite beating earnings and a flat growth outlook.

RL (NYSE) is up 10.9% on the Q3 revenue beat.

UA (NYSE) is up 1.3% after raising its profit forecast.

In other economic news, due to rising weekly jobless claims, the bond market surged higher. The 10-year Treasury yields rose by 1.1% to 4.143. The fixed 30-year mortgage rates jumped by 1,57% to 4.337. At the same time, oil prices have also seen a noticeable increase. The West Texas intermediate surged by 3% this session only, raising its prices to $76.4 per barrel. Bernt crude oil surprised the $80 level for the first time this year. The indexes were up by 2.17% to $80.5 per barrel. On the other hand, natural gas prices have fallen by 2.34%, and gold prices have fallen by 0.21%. Still, gold has surprised the $2000 limit with its current level of $2000.5 per ounce.

Written by Editor

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