Wall Street turns higher after jobless claims hit new pandemic-era low

Stocks fell on Thursday, with Wall Street poised for a 4th consecutive day of losses, as investors struggle to reconcile a still hot jobs market with an economy that’s had its momentum dented by soaring COVID-19 infections. 

On Wednesday, the Dow Jones Industrial Average and S&P 500 Index posted their 3rd consecutive day of losses, and the technology-laced Nasdaq fell for the first time since last week. The market has mostly taken disappointing news in stride, but August’s jobs data falling far short of market expectations last week tempered hopes for the fourth quarter.

Separately, however, Labor Department data showed that open jobs hit yet another series record, with workers quitting their jobs en masse, and nearly 11 million positions unfilled. On Thursday, new jobless claims set a new pandemic era low at 310,000, temporarily allaying fears about the economy.

“We’re transitioning from a very early cycle environment in which growth was super charged coming out of the recession last year…” PIMCO managing director and portfolio manager Erin Browne told Yahoo Finance Live on Thursday. “We’re still in a very good spot in the economy and…in terms of corporate profitability and the outlook for it.”

However, investors are trying to calibrate a jobs market that remains historically hot against growth that’s clearly losing momentum, based on the resurgence of COVID-19 infections led by the Delta variant.

The U.S. economy “downshifted slightly” in August as concerns grew over how the renewed surge of coronavirus cases would affect the economic rebound, the Federal Reserve said on Wednesday in its latest Beige Book. 

The latest labor market reads contrast sharply with August payrolls, which showed the economy creating a relatively slim 235,000 new positions, and stoked speculation that the Federal Reserve’s Open Market Committee (FOMC) could alter its timetable for scaling back its stimulative bond-buying, which has propped up investor confidence.

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The uncertainty has prompted analysts to scale back expectations for the economy for the remainder year. Goldman Sachs cut its forecast for fourth-quarter growth, citing a “harder path ahead” for consumer spending in the face of rising COVID-19 infections.

However, Wall Street does not appear overly-concerned, at least for now, given that stocks are still within view of recent highs.

“Economic news and the future direction of the stock market don’t have to be riding in the same car,” Hennessy Funds portfolio manager Josh Wein told Yahoo Finance Live on Wednesday. “The market remains incredibly compelling notwithstanding a lot of noise.”

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12:20 p.m. ET: Stocks lose early gains, flatline at midday

Here’s where major indices traded as of 12:20 p.m.:

• S&P 500 (^GSPC): 4,512.51, -1.56 (-0.03%)

• Dow (^DJI): 35,022.57, -8.50 (-0.02%)

• Nasdaq (^IXIC): 15,316.90, +30.26 (+0.20%)

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10:55 a.m. ET: Stocks pick up steam, boosted by jobless claims 

At least for the moment, investors have decided that a healthy labor market is enough to cover a multitude of other economic ailments (namely the ravenous COVID-19 pandemic). Major benchmarks have turned decisively to the upside, with the Dow adding over 100 points, and the Nasdaq jumping by over 60 points. The S&P is a laggard, but up by 11 points.

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9:30 a.m. ET: Stocks flat at the opening bell

Here’s where stocks began the regular session:

• S&P 500 (^GSPC): 4,511.33, -2.74(-0.06%)

• Dow (^DJI): 34,991.73, -39.34 (-0.11%)

• Nasdaq (^IXIC): 15,300.78, +14.14 (+0.09%)

• Crude (CL=F): $68.03 per barrel, -$1.27 (-1.83%)

• Gold (GC=F): $1,799.60 per ounce, +$6.10 (+0.34%)

• 10-year Treasury (^TNX): flat, yielding 1.334%

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8:30 a.m. ET: Stocks turn flat after jobless claims set new pandemic era low

The U.S. economy is losing momentum, but one thing it’s not losing is jobs: Initial unemployment claims checked in at 310,000 in the latest week, well below estimates and setting a new COVID-19 era low. Stocks took heart from the news, turning flat after spending the pre-market session in the red.

7:50 a.m. ET Thursday: Futures lower ahead of jobless claims

Here’s where markets were trading ahead of the opening bell:

• S&P 500 futures (ES=F): 4,500.75, -11.75(-0.26%)

• Dow futures (YM=F): 34,928.00, -84.00 (-0.24%)

• Nasdaq futures (NQ=F): 15,587.75, -32.25(-0.21%)

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6:15 p.m. ET Wednesday evening: Stock futures tick lower

Here’s where markets were trading in the after-hours session:

• S&P 500 futures (ES=F): 4510, -2.25

• Dow futures (YM=F): 35,004, -8.00

• Nasdaq futures (NQ=F): 15,608.00, -12.00

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By Javier E. David, editor at Yahoo Finance. Follow him at @Teflongeek

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