U.S. stocks closed higher on Thursday, staging a strong comeback after suffering losses in the previous three sessions. Investors largely shrugged off concerns about inflation and possible monetary tightening by the Federal Reserve.
Data showing a bigger than expected drop in initial jobless claims in the U.S. and bargain hunting contributed to market’s rebound.
The major averages all ended with strong gains. The Dow advanced 433.79 points or 1.29 percent to settle at 34,021.45, after hitting a high of 34,181.77. The S&P 500 ended up by 49.46 points or 1.22 percent at 4,112.50, while the tech laden Nasdaq closed higher by 93.31 points or 0.72 percent at 13,124.99, well off the day’s high of 13,247.87.
Airlines stocks had a good outing, riding on an announcement from the Centers for Diseas Control and Prevention that people who are fully vaccinated need not wear face mask or maintain social distancing in most setting.
Travers Companies (TRV), JP Morgan Chase (JP), Home Depot (HD), 3M (MMM), IBM (IBM), DuPont (DWDP), Honeywell International (HON), Apple (AAPL), Goldman Sachs (GS), Cisco Systems (CSCO), Walmart (WMT) and Procter & Gamble (PG) were among the prominent gainers in the session.
Shares of Walt Disney Inc. declined sharply.
Investors shrugged off a Labor Department report showing producer prices increased by more than expected in the month of April.
The Labor Department said its producer price index for final demand rose by 0.6 percent in April after jumping by 1.0 percent in March. Economists had expected producer prices to increase by 0.3 percent.
The report also showed the annual rate of producer price growth accelerated to 6.2 percent in April from 4.2 percent in March, with prices showing the biggest annual increase since 12-month data were first calculated in November of 2010.
Meanwhile, a separate report from the Labor Department showed first-time claims for U.S. unemployment benefits fell by more than expected in the week ended May 8th, dipping to 473,000, a decrease of 34,000 from the previous week’s revised level of 507,000.
Economists had expected jobless claims to edge down to 490,000 from the 498,000 originally reported for the previous week.
With the bigger than expected decrease, jobless claims once again fell to their lowest level since hitting 256,000 in the week ended March 14, 2020.
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