Wall Street jumps as jobs data eases slowdown fears

Indexes up: Dow 1.52%, S&P 500 1.91%, Nasdaq 2.23%

By Reuters

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Published: Thu 8 Aug 2024, 9:42 PM

Wall Street's main indexes rose nearly 2% on Thursday, bolstered by a better-than-expected jobs report that eased worries of an imminent slowdown in the world's largest economy.

Data showed the number of new applications last week for unemployment benefits fell more than expected, suggesting the fear that the labor market was unraveling was overblown. Most megacap and growth stocks advanced, stabilizing after a free fall on Monday as a disappointing jobs report for the month of July sparked fears of a potential recession. Nvidia led the gains with a 4.4% surge.

"Just because the labor market is cooling off doesn't mean we're entering into a recession. While there has been renewed worry about the labor market, we believe it's overblown," said Skyler Weinand, chief investment officer at Regan Capital.

All major S&P sectors were trading higher, with information technology and communication services leading gains.

Global markets are also recovering from a rout earlier this week amid heightened volatility.

Earlier in the day, J.P.Morgan raised the odds of a U.S. recession by the end of this year to 35% from 25%, citing easing labor market pressures.

The Nasdaq closed 1% lower in the previous session, as tech stocks lost steam after a brief rebound following the global stocks rout triggered by an interest rate hike by the Bank of Japan, and weak demand in a 10-year Treasury auction.

At 11:28 a.m. the Dow Jones Industrial Average rose 589.53 points, or 1.52%, to 39,352.98, the S&P 500 gained 99.37 points, or 1.91%, to 5,298.87 and the Nasdaq Composite gained 360.42 points, or 2.23%, to 16,556.23.

On the earnings front, Eli Lilly jumped 7.9% after the drugmaker raised its annual profit forecast, and sales of its popular weight-loss drug Zepbound crossed $1 billion for the first time in a quarter.

Under Armour surged 19.2% after the sports apparel maker posted a surprise first-quarter profit, benefiting from its efforts to cut inventory and promotions.

Bumble slashed its annual revenue growth forecast, stoking worries about the dating app operator's growth plans, sending its shares down 32.6%.

Warner Bros Discovery dropped 8.8% after it wrote down the value of its TV assets due to the uncertainty of fees from cable and satellite distributors and sports rights renewals.

Monster Beverage lost 10.8% after the energy drinks maker missed market expectations for second-quarter sales as budget-conscious consumers kept a tight lid on spending.

Markets will now focus on comments from Richmond Fed President Thomas Barkin, who will be speaking at 3 p.m. ET, for any clues on the U.S. central bank's next move.

Advancing issues outnumbered decliners by a 3.76-to-1 ratio on the NYSE and 2.57-to-1 ratio on the Nasdaq. There were 25 new highs and 42 new lows on the NYSE.

The S&P 500 posted three new 52-week highs and three new lows, while the Nasdaq Composite recorded 18 new highs and 130 new lows.