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Stock Market News for Dec 8, 2023

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Market News

The broader S&P 500 and the 30-stock Dow ended in the green on Thursday on signs of strength in the economy. This is because initial jobless claims barely changed in the week ending Dec 2 from the prior week, indicating layoffs have been significantly low and the labor market remains healthy. The Nasdaq, on the other hand, gained traction after AMD and Alphabet sparked an AI-led mega-cap rally.

How Did the Benchmarks Perform?

The Dow Jones Industrial Average (DJI) rose 0.2%, or 62.95 points, to close at 36,117.38. Notably, 11 components of the 30-stock index ended in negative territory, while 18 were in green and one unchanged.

The tech-heavy Nasdaq Composite climbed 1.4% to close at 14,339.99.

The S&P 500 gained 0.8% to end at 4,585.59. Out of 11 broad sectors of the benchmark, eight ended in positive territory, while three finished in red. The Communication Services Select Sector SPDR (XLC), the Technology Select Sector SPDR (XLK) and the Materials Select Sector SPDR (XLB) advanced 2.1%, 1.2% and 0.7%, respectively, while the Energy Select Sector SPDR (XLE) declined 0.7%.

The fear-gauge CBOE Volatility Index (VIX) increased 0.7% to 13.1. A total of 11.2 billion shares were traded on Thursday, higher than the last 20-session average of 10.8 billion.

Economic Strength and Tech Surge Drive Market Rally

Both the S&P 500 and Dow Jones Industrial Average bounced back after a three-day decline, driven by a combination of strength and advancements in the technology sector. This market rally can be attributed to factors, including positive job market indicators and notable progress in artificial intelligence (AI).

The positive momentum began with signs in the job market. Initial jobless claims for the week ended Dec 2 remained remarkably low, indicating that layoffs have not been increasing. Investors are eagerly awaiting the release of today’s jobs report.

The tech-heavy Nasdaq index experienced an upturn primarily influenced by performances from tech giants like Advanced Micro Devices Inc. (AMD - Free Report) and Alphabet Inc. (GOOG - Free Report) . AMD’s announcement of AI chips led to a 9.9% rise in its shares.

Alphabet also witnessed an increase of 5.3% in its share price due to the introduction of its AI model called Gemini. Both carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

This current upswing highlights how interconnected foundations and transformative technological advancements are as we navigate through these times. Investors remain optimistic about emerging trends, finding confidence both in the job market and revolutionary developments in technology.

Economic Data

The Labor Department said on Thursday that initial jobless claims rose to 220,000, increasing 1,000 for the week ended Dec 2. The previous week's level was revised up by 1,000 from 218,000 to 219,000. The four-week moving average increased to 220,750, marking a rise of 500 from the previous week. The previous week's average was revised up by 250 to 220,250.

Continuing claims came in at 1,861,000 for the week ending Nov 25, decreasing 64,000 from the previous week’s revised level. The previous week's numbers were revised down by 2,000 from 1,927,000 to 1,925,000. The four-week moving average was 1,872,250, an increase of 7,000 from the previous week's revised average. The previous week's average was revised down by 500 from 1,865,750 to 1,865,250.

The Fed reported that the consumer credit decreased to $5.2 billion in October, lagging the consensus estimate of $8 billion. The data for September was revised upward to $12.2 billion from $9 billion reported earlier. Year over year, consumer credit rose 1.2% in October on a seasonally adjusted basis.


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