Markets edge up to set more records
NEW YORK >> U.S. stocks ticked higher Thursday to set more records as further evidence piled up to show the job market remains remarkably solid.
The S&P 500 inched up by 2.85 points, or 0.1%, to 4,997.91. The Dow Jones Industrial Average also set an all-time high after edging up by 48.97, or 0.1%, to 38,726.33. The Nasdaq composite gained 37.07, or 0.2%, to 15,793.71.
During the day, the S&P 500 briefly topped the 5,000 level for the first time. Such milestones don’t mean much in a market that’s supposed to be dictated by math and dollars and cents. But it can offer a psychological boost for a market that can often move on emotion as well.
“It is a great reminder of how far we’ve come, and it wasn’t that long ago that everyone on TV was telling us about a near certain bear market and recession,” said Ryan Detrick, chief market strategist at Carson Group.
The U.S. economy has blown past earlier expectations for a recession, and the latest show of strength came from a report indicating fewer workers applied for unemployment benefits last week than expected. The number remains low relative to history, even if layoffs at Google’s parent company, Macy’s and other big-name companies have been getting attention recently.
In prior months, such a report may have hurt the stock market because of concerns that it would mean a longer wait for cuts to interest rates from the Federal Reserve. But investors have been coming around to the idea that good news on the economy is good for stocks because it will drive profits for companies.
The latest set of earnings reports from big U.S. companies also kept the stock market mixed overall.
The Walt Disney Co. jumped 11.5% after it reported stronger profit for the latest quarter than analysts expected. It benefited from cost cuts and growth at its theme parks.
Ralph Lauren was another winner, rising 16.8% after its profit and revenue topped Wall Street’s forecasts. It said it saw strong holiday sales around the world, led by Asia.
U.s.-listed shares of Arm Holdings, a U.k.-based semiconductor company, soared 47.9% after it also topped analysts’ expectations.
Helping to offset those gains was Paypal, which slumped 11.2% even though it reported stronger profit than expected. It gave a forecast for expected profit across 2024 that fell short of analysts’.
S&P Global was also one of the heavier weights on the S&P 500 and fell 5% after reporting weaker profit for the latest quarter than analysts expected.
In the bond market, the yield on the 10-year Treasury rose to 4.14% from 4.12% late Wednesday.
Traders have taken heed of warnings from the Federal Reserve that its first cut to rates following years of rapid hikes won’t come soon, which has pushed the yield up this month.
Traders still expect rate cuts to come, just later in the year than they were hoping before. The Fed has said it doesn’t want to overdo high rates, which would create unnecessary pain for the economy. Traders are largely betting on the first cut coming in either May or June, after earlier hoping for March, according to data from CME Group.