Wall Street’s main indexes rebounded after a three-day slide on Thursday, helped by gains in technology stocks, as the smallest weekly jobless claims since the start of a pandemic-driven recession bolstered risk appetite.
The Dow’s gains were curbed by a 2.8% drop in shares of Cisco Systems Inc after the network gear maker cautioned that supply chain issues will linger through the end of 2021 and forecast its current-quarter profit below estimates.
Bitcoin regained some lost ground to trade near $40,000, a day after a brutal selloff. Crypto-exchange operator Coinbase Global, miners Riot Blockchain and Marathon Digital Holdings rebounded between 2.1% and 5.2% in sympathy with the digital coin.
“There was a lot of money drawn out from speculators initially but the market is beginning to gain ground and find comfortable levels,” said Arthur Weise, chief investment officer of Kingsland Growth Advisors.
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 for the third consecutive session on Wednesday after minutes from Fed’s meeting last month indicated many policymakers thought it would be appropriate to discuss easing crisis-era support in upcoming meetings if the strong economic momentum is sustained.
However, many analysts viewed the statement as old news as economic data since then has showed an unexpected slowdown in the labor market, fanning inflation worries.
“Unprecedented stimulus, supply chain imbalances, and prospects for a record tight U.S. labor market are creating high uncertainty about the inflation outlook,” said Linda Duessel, senior strategist at Federated Hermes.
Signs of rising inflation have increased bets that the Federal Reserve may tighten its policy soon, hitting rate-sensitive growth stocks that set the tech-heavy Nasdaq on track for its fifth consecutive weekly drop.
Technology and communication services sectors rose the most among the 11 major S&P sectors higher. Energy , financials and industrials slipped.
At 9:55 a.m. ET, the Dow Jones Industrial Average was up 76.83 points, or 0.23%, at 33,972.87 and the S&P 500 was up 22.25 points, or 0.54%, at 4,137.93. The Nasdaq Composite was up 127.52 points, or 0.96%, at 13,427.26.
Kohl’s Corp raised its forecast for 2021 sales, as the department store operator bets on a shopping boom but the outlook fell short of analysts’ estimates, sending its shares down 10.8%.
Ralph Lauren Corp dropped 7.1% after it forecast full-year sales below analysts’ estimates.
Advancing issues outnumbered decliners by a 1.14-to-1 ratio on the NYSE and by a 1.37-to-1 ratio on the Nasdaq.