Stock Indexes Open Higher; Dow, S&P 500 Approach Records; Weekly Jobless Claims Come in Lower Than Expected

Stocks opened higher Thursday, a day after the three major equities indexes all rose for the seventh time in eight sessions as weak private-sector employment data furthered traders’ belief that the Federal Reserve will cut interest rates at its meeting next week. 

The blue-chip Dow Jones Industrial Average, benchmark S&P 500, and tech-heavy Nasdaq rose about 0.2% apiece at the bell. The indexes finished up a respective 0.9%, 0.3%, and 0.2% Wednesday, with the Dow adding more than 400 points.

Both the Dow and S&P 500 are within 1% of their all-time closing highs, and the Nasdaq is about 2% below its record closing level.

Yesterday, the ADP employment reading for November indicated that private payrolls fell by 32,000 last month when an increase of 40,000 jobs was expected. The report was the last monthly jobs reading for the Fed before its meeting on interest rates.

In economic data early Thursday, weekly jobless claims came in at 191,000 when 218,000 was the median expectation, and Challenger, Gray & Christmas said that through November, U.S. employers have announced near 1.2 million job cuts—the highest level since 2020, when the pandemic hit. The yield on the 10-year Treasury note briefly ticked higher to 4.10% immediately after the jobless-claims reading, then slipped back to 4.08%.

The CME FedWatch tool indicated traders believe with a nearly 90% likelihood that the Fed will cut rates by a quarter-percentage point, with investors keenly awaiting PCE inflation data tomorrow.

Bitcoin was trading just below $93,000, little changed on the day but up sharply after having suffered its worst day since March on Monday, when it closed below $85,500. The U.S. dollar index, which tracks the performance of the dollar against a basket of foreign currencies, was slightly lower at 98.81. WTI crude futures, the U.S. oil benchmark, rose 0.3% to $59.15 per barrel, while gold futures ticked higher to $4,240 per ounce.

In corporate news, shares of Meta Platforms (META) rose 4% after Bloomberg reported that the Facebook parent is expected to slash spending on the so-called “metaverse.” The other Magnificent Seven large-cap technology stocks were mixed, with shares of Nvidia (NVDA), the world’s most valuable company, up 1.5%.

Shares of Salesforce (CRM) rose about 1% at the open after the software giant late Wednesday posted better-than-expected quarterly profit and raised its outlook on the back of growth from its data products and AI offerings.

In other post-earnings stock moves, shares of UiPath (PATH) jumped 12%; Dollar General (DG) and Hormel (HRL) rose 5%; Five Below (FIVE) added 1.5%; Snowflake (SNOW) sank 9%; and Kroger (KR) fell 4%.