Stocks opening higher on Wall St.; Job market remains strong

BANGKOK –

Stocks are opening higher on Wall Street Thursday in a broad rally led by the IT and communications sectors.

The S&P 500 and Nasdaq are up over 1 per cent shortly after the open in New York, but remain on track for a losing month with one day remaining in the worst year for stock investors since 2008.

Tesla, Netflix and Paramount are leading the S&P’s gainers early on. New data shows the number of people seeking unemployment benefits rose modestly last week, a sign that the labor market remains strong. Treasury yields slipped.

This is a breaking news update. AP’s earlier story appears below.  

Shares slipped in Europe and Asia on Thursday after benchmarks fell more than 1 per cent on Wall Street in the middle of a mostly quiet and holiday-shortened week.

U.S. futures were mixed and oil prices declined more than $1 a barrel.

Investors are watching to see how China’s relaxation of its stringent COVID-19 policies, and the outbreaks of infections that have followed, will affect business activity and travel.

One concern is that the massive outbreaks could generate new, potentially vaccine resistant variants of the virus, “leading to knock-on virus surges across the globe, China’s reopening could still mark a positive step over the long run in light of past global attempts in bringing virus cases under control,” Yean Jun Rong of IG said in a commentary.

Germany’s DAX gave up 0.3 per cent to 13,887.22 and the CAC 40 in Paris lost 0.5 per cent to 6,480.47. Britain’s FTSE 100 dropped 0.6 per cent to 7,452.45.

The future for the S&P 500 edged 0.1 per cent higher, while that for the Dow Jones Industrial Average fell less than 0.1 per cent. On Wednesday, the S&P 500 fell 1.2 per cent and the Dow industrials declined 1.1 per cent. The Nasdaq slid 1.4 per cent, while the Russell 2000 gave up 1.6 per cent.

In Asian trading Thursday, the Hang Seng in Hong Kong shed 0.8 per cent to 19,741.14. The Shanghai Composite index ended 0.4 per cent lower at 3,073.70. Tokyo’s Nikkei 225 index lost 0.9 per cent to 26,093.67.

The Kospi in Seoul sank 1.9 per cent to 2,236.40 after the government reported South Korea’s industrial production fell 3.7 per cent from a year earlier in November, worse than forecast and a bigger drop than the 1.2 per cent decline in October. Retail sales were down 1.8 per cent from the month before.

Australia’s S&P/ASX 200 gave up 0.9 per cent to 7,020.10. Bangkok’s SET index gained 0.2 per cent. 

The worst year since 2008 for the S&P 500 has been winding down with little in the way of data to drive trading. But later Thursday, the U.S. government was due to release jobless claims, a measure of employment that could provide insight into how the economy is faring as the Federal Reserve raises interest rates to quash inflation.

The Fed has already raised its key interest rate seven times this year and is expected to continue raising rates in 2023. The key lending rate, the federal funds rate, stands at a range of 4.25 per cent to 4 per cent, and Fed policymakers forecast that the rate will reach a range of 5 per cent to 5.25 per cent by the end of 2023. Their forecast doesn’t call for a rate cut before 2024.

With two more days of trading left in 2022, the benchmark S&P 500 is headed for a roughly 20 per cent drop for the year, even as profits and margins for companies in the index have hit record heights this year. The Dow is on pace for a 9.5 per cent drop, while the Nasdaq is doing much worse, on pace to plunge 34.7 per cent.

Southwest Airlines slid 5.2 per cent Wednesday as the carrier grappled with the fallout after cancelling thousands of flight cancellations. The airline’s CEO said it could be next week before the flight schedule returns to normal. Shares in other airlines also fell. Delta Air Lines dropped 2.8 per cent and United Airlines fell 2.4 per cent.

Tesla rose 3.3 per cent as it stabilized from steep losses it suffered after reports Tuesday that it temporarily suspended production at a factory in Shanghai.

Early Thursday, U.S. benchmark crude had given up $1.40 to $77.56 per barrel in electronic trading on the New York Mercantile Exchange.

Brent crude, the pricing basis for international trading, shed $1.50 to $82.49 per barrel in London.

The U.S. dollar fell to 133.72 Japanese yen from 134.39 yen late Wednesday. The euro rose to $1.0636 from $1.0613.