Stocks Rally as Jobless Claims Drop: Dow Surges 270 Points
4:36 pm Thursday, August 05th, 2021
U.S. stocks jumped in a broad rally Thursday, as shares of bank, technology and travel companies rose in tandem.
Some encouraging economic data has helped the cause: weekly initial claims decreased to 385,000 (consensus 375,000), weekly continuing claims (2.930 mln) dipped below 3.0 mln for the first time since the start of the pandemic, and the June trade deficit showcased a big jump in imports as the U.S. tried to meet the pent-up demand in the economy.
The cyclical undertones have been manifested in the leadership positions from the energy (+1.7%), financials (+0.8%), and consumer discretionary (+0.7%) sectors, the 10-yr yield being up three basis points to 1.21%, WTI crude futures ($69.03, +0.88, +1.3%) rebounding 1%, and Uber (UBER 43.55, +1.74, +4.2%) being up 4% following its earnings report.
In the same vein, several stocks that benefited greatly from the pandemic were struggling following their earnings reports, namely Moderna (MRNA), Roku (ROKU), Etsy (ETSY), and Fastly (FSLY).
The health care sector (-0.9%) was the only sector trading lower amid the loss in Moderna and disappointing earnings news from Cigna (CI) and Cardinal Health (CAH).
M&A activity has supported risk sentiment, too. Qualcomm (QCOM) submitted an offer to acquire Veoneer (VNE) for $37 per share, or about $4.1 billion, in cash. Score Media and Gaming (SCR) agreed to be acquired by Penn National Gaming (PENN) for $2.0 billion in cash and stock.
Separately, Walmart (WMT) was up 2% after the stock was upgraded to Overweight from Equal Weight at Wells Fargo.
