U.S. stocks ended the holiday-shortened week in subdued fashion Thursday, recovering from early losses after new jobless-claims data suggested that layoffs have recently increased more than previously thought.
The S&P 500 climbed 14.64 points, or 0.4%, to 4105.02 and the Dow Jones Industrial Average inched up 2.57 points, or less than 0.1%, to 33485.29. The tech-heavy Nasdaq Composite rose 91.09 points, or 0.8%, to 12087.96. The stock market will be closed Friday, when the March jobs report will be released, while the bond market will be open for an abbreviated session.
Stocks showed little momentum in either direction this week after notching sizable gains last week. Investors remain optimistic that recent strains in the banking sector won’t lead to a full-blown crisis and are also cheered by signs that the Federal Reserve may be nearly done raising interest rates. But they remain on edge about the economic outlook, with recent data providing some cause for concern.
“We really are in a range and we have been for a while now,” said
Michael Antonelli,
market strategist at Baird.
The good news, Mr. Antonelli said, is investors can focus on economic data, without worrying too much that a banking crisis will make the reports irrelevant. Investors can also worry less than in the past that good economic data would be bad for stocks by leading to supersize interest-rate increases. Still, he said, stocks remain in something of a rut because economic reports keep sending different signals, making it hard to know if the economy is in good shape or heading to a recession.
For the week, the S&P 500 edged down 0.1%, while the Dow gained 0.6% and the Nasdaq fell 1.1%.
Thursday’s jobless claims data provided the latest evidence that the labor market might finally be cooling.
Claims, a proxy for layoffs, totaled 228,000 last week on a seasonally adjusted basis. That was down from 246,000 the previous week. However, large revisions to past weeks—based on changes in how the government strips out seasonal fluctuations in economic activity—indicated that layoffs have been much higher this year than previously reported.
Bank stocks were among the better performers Thursday. Shares of the regional bank Western Alliance rose $1.41, or 4.8%, to $30.78 after dropping 12% Wednesday when it disclosed a plunge in deposits in the final weeks of March. Larger banks also climbed, with
gaining $1.01, or 2.7%, to $37.90.
Shares of
meanwhile, dropped $11.15, or 2.2%, to $485.98 after the warehouse retailer reported a monthly drop in same-store sales, the first decrease by that measure since 2020.
“Our view is that we’re not going to enter into a severe recession, but the reality is, the indicators are getting more consistent with something maybe a little bit deeper than what we thought was going to happen six months ago,” said Des Lawrence, senior investment strategist at State Street Global Advisors.
Investor concerns about the economic outlook have been particularly evident in U.S. Treasurys.
The yield on the benchmark 10-year U.S. Treasury note settled at 3.288%. That was little changed from Wednesday but down from 3.491% at the end of last week, reflecting a run of lackluster data that has caused investors to bet that future interest rates won’t be as high as previously expected.
Among commodities, gold prices edged down 0.4% after a stretch of gains that pushed the metal close to record highs. U.S. crude oil edged up 0.1% to $80.70 a barrel.
Overseas, the Stoxx Europe 600 gained 0.5%. Hong Kong’s Hang Seng gained 0.3%, while Japan’s Nikkei 225 fell 1.2%. South Korea’s Kospi lost 1.4%.
Investors’ attention now turns to the March jobs report due Friday.
Photo:
Victor J. Blue/Bloomberg News
Write to Sam Goldfarb at sam.goldfarb@wsj.com and Caitlin McCabe at caitlin.mccabe@wsj.com
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Appeared in the April 7, 2023, print edition as ‘Stocks Advance as Jobless Data Signal More Layoffs.’
