Wall St holds ground as jobless claims fall to near 18-month low

Wall St holds ground as jobless claims fall to near 18-month low
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NEW YORK (Sept 9): Wall Street indexes held steady on Thursday as weekly jobless claims fell to a near 18-month low, allaying fears of a slowing economic recovery.

The Labor Department said initial claims for state unemployment benefits dropped 35,000 to a seasonally adjusted 310,000 for the week ended Sept 4, the lowest level since mid-March 2020.

The economy-sensitive S&P 500 financial sector index and the banking sub-index were among the top gainers, rising about 0.7% each.

JPMorgan, Wells Fargo, Citi Group and Morgan Stanley gained between 1.1% and 1.6%, tracking a slight rise in benchmark bond yields following the data.

Six of the 11 major S&P 500 sectors were higher in early afternoon trading, with the defensive real estate, utilities and consumer staples falling the most.

"This jobs data is counter-intuitive to the way market are moving because it provides a reason for the Federal Reserve to pull back its asset purchases sooner, a factor that has weighed on markets recently," said Jeff Powell, managing partner at Polaris Wealth Advisory Group.

The S&P 500 and the Dow Jones were little changed after gaining in early trading, hinting they were set to snap a three-day losing streak.

Investor mood has been glum this week after a recent monthly jobs report showed a slowdown in US hiring amid worries over a fading recovery. Uncertainties over the US Federal Reserve's stimulus tapering timeline has also been a drag on sentiment.

"Bull markets will continue to climb a wall of worry and while people are worried about inflation and COVID-19 and the Fed, the market seems to be nervously optimistic in their trades with earnings expectations being positive for the coming quarters," Polaris's Powell said.

At 12.26pm ET, the Dow Jones Industrial Average was down 1.01 points, or 0.00%, at 35,030.06, the S&P 500 was down 1.05 points, or 0.02%, at 4,513.02, and the Nasdaq Composite was up 35.66 points, or 0.23%, at 15,322.30.

Video game retailer GameStop Corp fell 3.2% on the company's silence on its turnaround plan in its first post-earnings conference call by new Chief Executive Matt Furlong.

Reports that Beijing slowed down approval for all new online video games sent shares of US-listed gaming stocks Activision Blizzard Inc, Electronic Art Inc, and Take-Two Interactive Software Inc down between 1% and 2.7%.

Data center REIT Digital Realty slid 4% to be the top decliner among real estate stocks after the company announced a public offering of 6.25 million shares.

Advancing issues outnumbered decliners by a 1.44-to-1 ratio on the NYSE and by a 1.7-to-1 ratio on the Nasdaq.

The S&P index recorded 26 new 52-week highs and one new low, while the Nasdaq recorded 57 new highs and 27 new lows.