The S&P 500 Index looked set to build on its record run Thursday, with tech stocks poised to help that campaign, while the Dow looked flat, ahead of expected comments from Federal Reserve Chairman Jerome Powell. A weekly report on those seeking unemployment benefits in the US showed an unexpected increase, perhaps reinforcing the Fed’s concern about the COVID labor market recovery.
How are equity benchmarks doing? Futures for the Dow Jones Industrial Average YMM21, -0.08% YM00, -0.08% were down 23 points to 33.305, a drop of less than 0.1%. S&P 500 ESM21 futures, + 0.28% ES00, + 0.28% gained 10.60 points to reach 4,080.50, a gain of 0.3%. Nasdaq-100 NQM21 futures, + 0.83% NQ00, + 0.83% advanced 107 points, or 0.8%, to 13,711.75. On Wednesday, the S&P 500 SPX, + 0.15% added 6.01 points, or 0.2%, enough to finish at a record 4,079.95, its 18th of the year. The Dow DJIA, + 0.05%, rose 16.02 points, or 0.1%, to close at 33,446.26, its second highest result in its history, the Nasdaq Composite Index COMP, -0.07% lost 9.54 points, or 0.1%, ending at 13,688.84, while booking a second consecutive day of losses. The Russell 2000 small-cap RUT index, -1.60% plunged 1.6% to close at 2,223.05. What drives the market? A day after the Federal Reserve’s March policy meeting minutes were released, the market may get more clarity from the central bank on the way forward. Fed Chairman Powell will discuss the world economy at a webcast conference hosted by the International Monetary Fund at 12 pm ET Thursday. On Wednesday, the minutes of the Fed’s March 16-17 meeting of policymakers indicated concerns about the recovery in the labor market, which is still recovering from the COVID pandemic. Weekly claims for unemployment benefits in the United States may reinforce that notion, showing an increase from 16,000 to 744,000, above the 694,000 expectations of economists surveyed by Dow Jones. Claims rose to 728,000 in the previous week from the previous estimate of 719,000. “Bottom line, with 7.4mm job vacancies through February, and let’s assume more since then, this level of claims is somewhat confusing, but still points to speculation about the impact generous unemployment benefits are making on the incentive of people to get a job, “wrote Peter Boockvar, chief investment officer at Bleakley Advisory Group. However, ongoing claims fell 16,000 to 3.73 million, marking the lowest level for that employment measure since March 21, 2020. The Fed in its minutes also reported that it will be “some time” before the central bank’s monthly assets are reduced. purchase program, or before benchmark interest rates rise from current levels near 0%. That sentiment may be enough to keep markets high, at least for now. “The minutes of the [Federal Open Market Committee] The March meeting revealed nothing new, but a reiteration of the Fed’s supportive stance appears to have been a tonic for the markets, ”wrote Sophie Griffiths, a market analyst at Oanda, in a daily note. Fed officials have primarily downplayed fears of rising inflation, which has gripped the market and helped fuel a rise in benchmark bond yields. Rising bond yields have hurt appetite for speculative stocks, including those in technology and related sectors that have thrived amid pandemic lockdown measures. “Federal Reserve legislators believe that any increase in inflation will be temporary and they consider it necessary to continue supporting the economy until the recovery is on firmer ground,” the analyst said. The yield on the 10-year Treasury note TMUBMUSD10Y, 1.650% was stable on Thursday at around 1.65%. Bond prices rise as yields fall. What companies are in focus? Canopy Growth Corp. CGC said Thursday that it will acquire Toronto-based Supreme Cannabis Co. Inc. SPRWF in a stock-and-cash deal valued at approximately C $ 435 million ($ 345.6 million). Telsa Inc. TSLA has expressed frustration with the bureaucracy that it says is hampering the construction of a new gigafactory on the outskirts of the German capital Berlin, and has now offered its own reform proposals to German authorities, AFP reported. Shares of Valero Energy Corp. VLO fell in pre-market trading on Thursday after the maker of transportation fuels and petrochemicals provided a negative outlook for the first quarter, citing higher-than-expected costs as a result of the Impact of Winter Storm Uri on its refining and ethanol business. Constellation Brands Inc. STZ posted stronger-than-expected earnings for its fiscal fourth quarter on Thursday, although earnings fell from the prior-year period. Cloud company Box Inc. BOX said Thursday that it reached an agreement with private equity firm KKR KKR in which KKR funds will lead a $ 500 million investment in the company in the form of convertible preferred shares. Shares of GameStop Corp. GME rallied in premarket trading on Thursday, setting them up on a three-day losing streak after the video game and consumer electronics retailer said it plans to name Ryan. Cohen as chairman of the board. Kathy Vrabeck is currently chair of the board. Shares of Conagra Brands Inc. CAG rose Thursday in premarket trading after the food company, whose brands include Birds Eye, Healthy Choice, Slim Jim and Reddi-wip, reported third-quarter earnings and sales. tax that exceeded expectations.