The S&P 500 was on its way to its sixth consecutive all-time closing high on Thursday, as investors greeted a new quarter and the second half of the year in a buying mood.
The blue-chip Dow joined the bellwether S&P in positive territory, but a decline in tech shares – led by microchips – helped pull the Nasdaq slightly lower.
The Philadelphia SE Semiconductor index (.SOX) was last down 1.5%.
“The first trading day of the quarter bodes well,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. “I see gains in this quarter but not as vivacious as they were in the second quarter.”
The ongoing worker shortage, attributed to federal emergency unemployment benefits, a childcare shortage and lingering pandemic fears, was a common theme in the day’s economic data.
Jobless claims continued their downward trajectory according to the Labor Department, touching their lowest level since the pandemic shutdown, and a report from Challenger, Gray & Christmas showed planned layoffs by U.S. firms were down 88% from last year, hitting a 21-year low.
Activity at U.S. factories expanded at a slightly decelerated pace in June, according to the Institute for Supply Management’s (ISM) purchasing managers’ index (PMI), with the employment component dipping into contraction for the first time since November. The prices paid index, driven higher by the current demand/supply imbalance, soared to its highest level since 1979, according to ISM.
“Jobless claims were better than expected and enthusiasm for stocks continues,” Cardillo added. “I suspect that with tomorrow’s labor report enthusiasm will likely expand.”
Market participants now look to Friday’s hotly anticipated employment report, which is expected to show payrolls growing by 700,000 and unemployment inching down to 5.7%. A strong reading could lead the U.S. Federal Reserve to adjust its timetable for tapering its securities purchases and raising key interest rates.
Given the scarcity of workers, wage inflation and the labor market participation rate are likely to be more closely scrutinized that usual.
After Friday’s jobs data, the next likely catalyst will be second-quarter earnings season set to kick off in the coming weeks.
The Dow Jones Industrial Average (.DJI) rose 87.97 points, or 0.25%, to 34,590.48, the S&P 500 (.SPX) gained 16.62 points, or 0.39%, to 4,314.12 and the Nasdaq Composite (.IXIC) dropped 18.33 points, or 0.13%, to 14,485.62.
Of the 11 major sectors in the S&P 500, energy (.SPNY) enjoyed the largest percentage gain. Tech (.SPLRCT) was the sole loser.
Didi Global Inc (DIDI.N) jumped 17.0%, on its second day of trading as U.S.-listed company.
Micron Technology Inc (MU.O) slid by 5.8% despite the chipmaker beating quarterly profit estimates for and raising its revenue forecast, and on the heels of a report that Texas Instruments (TXN.O) would buy Micron’s Lehi, Utah, factory for $900 million.
MGM Resorts International (MGM.N) advanced 1.7% following its announcement that it will buy the remaining 50% stake in its JV, CityCenter Holdings LLC, for $2.125 billion from Infinity World Development.
Advancing issues outnumbered declining ones on the NYSE by a 1.83-to-1 ratio; on Nasdaq, a 1.13-to-1 ratio favored advancers.
The S&P 500 posted 31 new 52-week highs and no new lows; the Nasdaq Composite recorded 63 new highs and 25 new lows.