WALL Street stocks rallied Thursday (Aug 8) after better employment data, extending a period of volatility and significantly cutting into the week’s losses.
Initial US jobless claims declined compared with the prior week, easing concerns somewhat of a possible US recession after last week’s monthly employment data sparked unease.
“We are seeing value investors show up and buying this dip and the question is, will it continue?“ said Adam Sarhan of 50 Park Investments.
The Dow Jones Industrial Average gained 1.8 per cent to 39,446.49, leaving it down just 0.7 per cent for the week.
The broad-based S&P 500 jumped 2.3 per cent to 5,319.31, while the tech-rich Nasdaq Composite rose 2.9 per cent to 16,660.02.
All 11 sectors in the S&P 500 advanced, while the Nasdaq was overwhelmingly positive.
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Markets have been nervous about the US economy since last Friday’s monthly jobs report prompted losses that intensified into a rout on Monday. Stocks rose Tuesday, fell Wednesday and have now risen again on Thursday.
Besides recession worries, US stocks were also hit by fallout from the unwinding of the so-called “carry trade” after the Bank of Japan raised interest rates last week.
The yen has since fallen back after the Bank of Japan signaled a dovish approach on interest rates.
“Things have calmed down significantly,” said Art Hogan of B Riley Wealth, who said the volatility stems from uncertainty on whether signs of a slowing US economy show “normalisation” or portend a recession.
Among individual companies, Eli Lilly surged 9.4 per cent, boosted by strong sales of drugs that treat diabetes, weight loss and metastatic breast cancers. AFP
