Wall Street Opens Higher as Jobless Claims Bolster Fed Hopes; Dow up 420 Pts

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By Geoffrey Smith 

Investing.com — U.S. stock markets opened higher on Thursday, extending Wednesday’s gains on growing hopes that China can avoid a messy deleveraging of its real estate sector, and that the Federal Reserve may yet put off tightening monetary policy beyond the end of the year.

By 9:40 AM ET (1340 GMT), the Dow Jones Industrial Average was up 416 points, or 1.2%, at 34,675 points. The S&P 500 was up 1.0% and the Nasdaq Composite was up 0.7%.

Fed Chair Jerome Powell had hinted at Wednesday’s press conference that the process of ‘tapering’ bond purchases would begin later this year, and be completed by the middle of 2022. However, this week’s jobless claims data, which followed a much weaker-than-expected labor market report for August, have encouraged those who believe that the Fed will keep its foot to the floor for a little longer.

Earlier, the U.S. notched 351,000 initial jobless claims last week, more than expected and a second straight weekly increase, suggesting that the Delta-variant Covid-19 surge seen during the summer is finally feeding through into lay-offs. Some analysts noted however that seasonal factors and disruptions from two hurricanes may also have contributed to the uptick. 

Continuing claims also came in above expectations, while IHS Markit’s Purchasing Manager Index for the U.S. economy fell by more than expected. While Markit’s PMI isn’t as closely followed in the U.S. as the Institute of Supply Management’s it does point to a clear slowdown in September.

 Novavax (NASDAQ:NVAX) stock was the standout performer in early trading, rising 9.5% after the biotech company said it had applied to the World Health Organization, along with its partner the Serum Institute of India, for an emergency use approval of its Covid-19 vaccine. According to the results of a phase-3 trial of the drug published earlier Thursday in the U.K., the vaccine was 89.7% effective in preventing serious illness and no participants who took the drug were admitted to hospital with any side-effects. 

Salesforce (NYSE:CRM) stock also performed strongly after the business software company raised its revenue forecast for the fiscal 2022 year, ending in January, and guided for revenue growth of over 20% in fiscal 2023. The stock rose 5.0%. Accenture (NYSE:ACN) stock also rose 1.3% after slightly stronger-than-expected earnings and guidance.

FedEx (NYSE:FDX) stock continued to underperform after its disappointing quarterly update on Tuesday, but the logistics firm appeared to find a short-term bottom, eking out a 0.2% gain. 

Elsewhere, Roku (NASDAQ:ROKU) stock 2.8% after an upgrade to ‘buy’ from Guggenheim, citing the advances it is making in the international market. 

Aterian (NASDAQ:ATER) stock was a rare decliner, falling 25% after announcing it would issue $66 million in new stock to pay down most of a loan to its biggest creditor, High Trail.

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