PARIS (Reuters) – The New York Stock Exchange opened higher on Thursday after a U.S. employment report suggested that fears about a worsening labor market may be overblown.
In early trading, the Dow Jones index gained 0.57% to 38,977 points and the broader Standard & Poor’s 500 rose 0.98% to 5,250 points.
The Nasdaq Composite gained 1.2% to 16,386 points.
An hour before Wall Street opened, the U.S. Labor Department said jobless claims fell last week to 233,000 from 250,000 the previous week and the average estimate of 240,000 among economists polled by Reuters.
The publication of this statistic certainly confirms the slowdown in the labor market, but the drop in the number of Americans claiming unemployment benefits is above all a relief for investors who have recently been fearing a recession in the world’s largest economy.
They believe that a sharp deterioration in the economy could force the US Federal Reserve (Fed) to be more aggressive in its monetary easing policy as its next rate decision is not until September.
“Unemployment claims came in lower than expected, partly alleviating fears of a complete reversal in the labor market,” said Thomas Hayes, president of Great Hill Capital.
“We have a reasonably robust economy and not a looming recession, so we can wait a few more weeks before the first Fed cut,” he added.
On the markets, the VIX volatility index fell by 6.1% to 26.14 points, a sign that fears have eased.
In the stock market, Eli Lilly rose 13% after raising its annual sales forecast on the back of rising demand and increased production capacity for its anti-obesity drug Zepbound. Novavax, on the other hand, fell 12.6% after lowering its revenue forecast for this year.
Warner Bros Discovery also fell, by 8.1%, as the group wrote down the value of its television assets amid uncertainty over the royalties it receives.
Dating app operator Bumble is down 33.5% after lowering its annual revenue growth forecast.
Robinhood gained 2.8% on better-than-expected quarterly profit amid growing interest in meme stocks and crypto assets.
(Written by Claude Chendjou, edited by Kate Entringer)
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