Stock Market Tries To End Losing Streak As Jobless Claims Rise; Meme Stock GameStop Gains On Earnings
The stock market gained Thursday morning after jobless claims rose and the S&P 500 took a breather from five consecutive days of losses. Meme stock GameStop (GME) soared more than 8% after reporting a quarterly decline in sales but a narrower loss vs. a year ago.
The Nasdaq composite rose 1.3% while the S&P 500 gained 0.8%. The Dow Jones Industrial Average rose 0.8%. The small-cap Russell 2000 index rose 1.2% in early trading.
Volume rose on the NYSE but fell on the Nasdaq vs. the same time on Wednesday.
The yield on the benchmark 10-year Treasury note dropped 4 basis points to 3.46%. Crude oil prices rose 1.7% to $73.26 per barrel.
The Innovator IBD 50 ETF (FFTY) gained 1.3%, helped by oil stocks.
Stock Market Gains On Jobless Claims Rise
First-time unemployment claims rose to 230,000 vs. 225,000 in the prior week, above the 228,000 consensus estimate. However, the fact that jobless claims remain low is a sign the labor market remains tight.
Next week the Fed is meeting and is widely expected to raise rates by a half of a percentage point.
The probability the Fed will raise rates by 0.5% next week is pegged at 74.7%, while odds for a 75-basis-point hike are 25.3%, according to the CME FedWatch tool.
In other action, the Hang Seng Index shot up 3.4% on reports that Hong Kong is considering scrapping its outdoor mask mandate. In mainland China however, the Shanghai Composite fell 0.1%, while in Japan the Nikkei 225 lost 0.4%.
In Europe, the FTSE 100 fell 0.1%, the German DAX 0.2% and the French CAC 40 0.3% in afternoon trading.
Tesla Sags On Reports Of Reduced Factory Shifts In China
Tesla stock dropped 0.4% after reports the company has shortened Shanghai factory shifts and delayed new hires due to slowing demand in the China auto market. However, Tesla quickly refuted those reports, saying the claims that it was cutting its Shanghai plant production by up to 20% were “untrue.”
Tesla shares are already down more than 10% this week. Despite the losses, the stock is holding above its 52-week low set in mid-November.
Chevron (CVX) led the Dow Jones industrials, up 2% as oil prices rebounded and after the company announced a 25% increase in its 2023 capital spending. Exxon Mobil (XOM) also gained on expanded earnings guidance, and after increasing its share repurchase program to $50 billion.
GameStop stock gained 8% after reporting a quarterly decline in sales and a narrower loss vs. a year ago. The former meme stock and video game retailer grew a trading fan base in late 2020. In January 2021, the stock shot up 1,625% to 81.25 and then crashed. With one brief exception, the stock has traded in the 20s since August.
Ciena (CIEN) shot up nearly 18% Thursday after reporting October-quarter profit and revenue that easily topped analyst estimates as supply chain problems eased. Management forecast fiscal 2023 revenue growth for the fiber optics stock in a range of 16% to 18%.
Stock Market Movers And Shakers
JPMorgan Chase (JPM) was up 0.8% after Piper Sandler analyst R. Scott Siefers initiated coverage of the stock with an buy rating and a 150 price target. JPM was upgraded by Morgan Stanley on Tuesday.
Costco (COST), Lululemon (LULU) and Broadcom (AVGO) are set to report earnings after the close today.
Shares of Costco have fallen below the 50-day line but remain in a cup-with-handle base with a buy point of 542.68. As of now there is no sell signal but investors should keep a look out for earnings.
Follow Michael Molinski on Twitter @IMmolinski
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