S&P 500 Rides Tech to Close Higher After Surprise Gain in Jobless Claims By Investing.com

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By Yasin Ebrahim

Investing.com – The S&P 500 closed higher Thursday, after recovering intraday weakness supported by a bid up technology stocks amid falling Treasury yields following data showing a surprise rise in weekly jobless claims.

The rose 0.21%, the gained 0.07%, or 25 points, the was up 0.36%.

In the week ended July 17, initial jobless claims unexpectedly climbed by 51,000 to 419,000, a nine-week high, confounding economist estimates for a decline to 350,000. Still the move was largely brushed off by some economists, who see it as a one-off and expect the downward trend in claims to resume course.  

“At this point, we’re inclined to believe that this is once again a ‘one-off’ situation with this week’s back-up in claims as demand for labor remains extremely strong and there is nothing that stands out to us as a reason to have expected layoff activity to rebound. We will be looking for claims to resume their downward trend next week,” Jefferies (NYSE:) said in a note.

U.S. Treasury yields were on the back foot following the data, though recovered some losses intraday. Banks were hit hard amid the stumble in yields, but technology racked up gains as lower yields make longer duration, or investments that have a longer payback period, attractive.

People’s United Financial (NASDAQ:), M&T Bank (NYSE:) and Charles Schwab Corp (NYSE:) were down more than 3%.

In large-cap tech, Microsoft (NASDAQ:) was in the spotlight, hitting a fresh 52-week high as investors piled into the stock ahead of the tech giant’s quarterly results slated for next week.

“We expect another ‘beat and raise’ special from Redmond with Azure growth numbers (45%+ YoY) that exceed whisper expectations and headline numbers that comfortably exceed the Street’s $44 billion and $1.90 estimate,” Wedbush said in a note.

Facebook (NASDAQ:), Google-parent Alphabet (NASDAQ:), Apple (NASDAQ:), and Amazon.com (NASDAQ:) were higher.

Energy was also a source of pain for the broader market, down nearly 1%, shrugging off rising oil prices amid weakness in Cabot Oil & Gas Corporation (NYSE:), Baker Hughes Co (NYSE:) and Valero Energy Corporation (NYSE:).

On the earnings front, Domino’s Pizza Inc (NYSE:) jumped more than 14% after the pizza chain delivered quarterly results that topped expectations on both the top and bottom lines, driven by its new menu items.

Southwest Airlines (NYSE:) fell 3% as better-than-expected quarterly results were overshadowed by ongoing threat that rising Covid infections pose to travel demand.

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