Wall Street manages higher start following jobless data

The main indices on Wall Street opened on a higher footing on Thursday after the weekly US jobless claims numbers came in ahead of expectations.

Shortly after the opening bell, the Dow Jones Industrial Average was up 0.28% at 34,599 while the S&P 500 rose 0.22% to 4,307 and the Nasdaq inched up 0.05% to 14,510.

The positive open followed US jobless claims for last week came in better than expected, a further sign of the recovery of the US economy.

The number of Americans seeking unemployment support in the week was 364,000, a decrease of 51,000 from the previous week and the lowest level since 14 March 2020.

This is better than the fall to around 388,000 which had been forecast, meanwhile the previous week’s figure was revised up by 4,000 to 415,000.

Charles Hepworth, investment director at GAM Investments, said: “Whilst this data print is volatile week to week, the overall tone points to the slow continual improvement in the US economy and in particular the jobs market as the economy continues to reopen.

“As certain states begin to phase out unemployment pandemic assistance, it is obvious that workers will feel more compelled to seek work and one has to expect, bar a resurgence of new variants hampering the reopening, the trend will see further declines in unemployment from here.”

7:50am: Wall Street to open on a mixed note

Wall Street is set for a mixed start following a similar performance on Wednesday.

The Dow is expected to open 42 points or 0.05% higher and the S&P around 0.01%. But the Nasdaq is indicated 0.21% lower.

Sophie Griffiths, market analyst at Oanda, said: “Today all eyes will be on US ISM manufacturing PMI, particularly the prices subcomponent, given the recent spike in inflation. The paid prices index is expected to inch lower to 87 in June, down from 88. Jobless claims and the Challenger jobs report will provide further clarity on the health of the US jobs market ahead of tomorrow’s key non-farm payrolls.”

Also on the agenda is the return to the stock market of Krispy Kreme following a buyout in 2016.

It will join Nasdaq with the ticker DNUT, but its shares have been set at $17 each, below the bottom end of the predicted price range.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “Timing is everything for an IPO, and this launch comes at a time when the public is becoming more health conscious, particularly following the pandemic where obesity now appears to have been a major factor in cases of severe sickness.

“The fact that [the price] has come in well below the bottom of the expected range indicates that initial demand for shares was lukewarm. As with any new offering, there could well be a flurry of interest as soon as trading begins, with customers and retail investors still keen to get a bite of the action.”

Three things to watch for on Thursday:

• Companies delivering earnings on the first day of July include French’s Mustard owner McCormick & Co Inc (NYSE:MKC) and lighting and building management group Acuity Brands Inc (NYSE:AYI)
• Walgreens Boots Alliance Inc (NASDAQ:WBA) may also draw attention after the pharmacy chain upgraded its profit forecast
• On the macro front, jobless claims data will be in focus alongside manufacturing PMI readings

Story by ProactiveInvestors