Wall Street’s main indexes regained their footing on Thursday after a three-day slide, buoyed by gains in technology stocks as the smallest weekly jobless claims since the start of a pandemic-driven recession lifted the mood. It was also a good day for technology stocks in Canada, helping to propel the TSX to a record high close.
Bitcoin clawed back some lost ground to trade near US$40,000 a day after a brutal selloff, helping renew appetite for risk.
The S&P/TSX Composite Index rose 125.92 points, or 0.65%, at 19,542.95. The tech sector, which rose almost 3%, was headlined by a 15.08% rally in shares of lightspeed POS. The company, which sells software for small and medium sized retailers and restaurateurs, said it believes a rebound is starting to materialize in its business, despite reporting a sizeable loss in its most recent quarter. But gains were quite broad in tech, with Shopify gaining 3.18% and CGI Group 2.14%.
Most other major sectors were also higher on the TSX, but energy shares dipped 0.68% as the price of crude oil slid more than 2%. That marked the third day in a row for losses in oil, after diplomats said progress was made toward a deal to lift U.S. sanctions on Iran, which could boost crude supply.
Brent crude fell $1.55, or 2.3%, to settle at US$65.11 a barrel. West Texas Intermediate crude ended $1.31, or 2.1%, lower at $62.05 a barrel. Both contracts fell around 3% in the previous session.
Iranian President Hassan Rouhani said in a televised speech that sanctions on oil, shipping, petrochemicals, insurance and the central bank had been dealt with in the talks.
“That really weighed on sentiment and that pushed us down a little bit,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. “There’s room in the global market for more Iranian oil but in the short term that’s what is weighing on us today.”
But European diplomats said success was not guaranteed and very difficult issues remained, while a senior Iranian official contradicted the president.
Indian refiners and at least one European refiner are re-evaluating their crude purchases to make room for Iranian oil in the second half of this year, anticipating that U.S. sanctions will be lifted, Reuters quoted company officials and trading sources as saying.
Meanwhile, U.S. Treasury yields fell after a weaker-than-expected U.S. business activity reading. The yield on benchmark 10-year U.S. Treasury notes fell 4.3 basis points to 1.640%.
The Philadelphia Federal Reserve Bank said its business activity index fell to 31.5 from 50.2 in April, its highest pace in nearly half a century. The reading was shy of economists’ expectations of 43.0.
Bitcoin was most recently up 8.9% at US$40,050 after plummeting to 54% below its record high, hit just over a month ago, after some of its prominent backers reiterated their support for the digital currency.
Smaller rival ether gained 15.32 to $2,811. On Wednesday, it fell 22.8%, its biggest daily fall since March 2020.
“There’s a big risk, regulatory risk, to crypto that’s not fully appreciated,” said Jay Hatfield, founder and chief executive of Infrastructure Capital Management in New York. “The central banks have a monopoly on currency. And so we just think that it’s a little bit surprising they haven’t enforced that monopoly.”
Market expectations of a further rise in inflation would need evidence of the economy moving past full employment very, very rapidly, said Steven Ricchiuto, U.S. chief economist at Mizuho Securities USA LLC.
“We’ve probably already reached the peak level of economic activity, and that probably happened in March and April,” Ricchiuto added.
The number of Americans filing for new claims for unemployment benefits fell to 444,000 in the week ended May 15, down for the third straight time, suggesting job growth picked up this month, though companies still are desperate for workers.
Wall Street’s main indexes fell on Wednesday after minutes from the Federal Reserve’s meeting last month indicated some policymakers thought it would be appropriate to discuss easing of crisis-era support, such as tapering bond purchases, in upcoming meetings if the strong economic momentum is sustained.
The Dow Jones Industrial Average rose 188.11 points, or 0.55%, to 34,084.15, the S&P 500 gained 43.44 points, or 1.06%, to 4,159.12 and the Nasdaq Composite added 236.00 points, or 1.77%, to 13,535.74.
Volume on U.S. exchanges was 9.30 billion shares, compared with the 10.05 billion average for the full session over the last 20 trading days. Retailers were a weak spot. Ralph Lauren Corp dropped 7.01% after it forecast full-year sales below analysts’ estimates, making it the largest percentage decliner on the S&P 500
Kohl’s Corp slumped 10.17% after warning of a hit to its full-year profit margin from higher labor and shipping costs, as well as selling fewer products at full price.
Advancing issues outnumbered declining ones on the NYSE by a 2.25-to-1 ratio; on Nasdaq, a 2.42-to-1 ratio favored advancers. The S&P 500 posted 17 new 52-week highs and no new lows; the Nasdaq Composite recorded 66 new highs and 28 new lows.
The June gold contract was up 40 cents US at US$1,881.90 an ounce and the July copper contract was down 0.85 of a cent at nearly US$4.57 a pound.
Read more: Stocks that saw action on Thursday - and why
With files from Reuters
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