After an initial move to the upside, stocks have seen considerable volatility over the course of the first trading session of the new year on Thursday. The major averages have shown wild swings back and forth across the unchanged line.
Currently, the major averages are posting modest gains. The Dow is up 31.12 points or 0.1 percent at 42,575.34, the Nasdaq is up 65.72 points or 0.3 percent at 19,376.52 and the S&P 500 is up 13.34 points or 0.2 percent at 5,894.97.
The early strength on Wall Street came as some traders looked to pick up stocks at relatively reduced levels following the notable downward move seen to close out 2024.
The S&P 500 and the Nasdaq closed lower for four straight sessions, with the tech-heavy Nasdaq ending New Year’s Eve trading at its lowest closing level in a month.
Buying interest waned shortly after the start of trading, however, as a Labor Department report showing an unexpected decline by weekly jobless claims seemingly provides support for the Federal Reserve’s measured approach to lowering interest rates.
The report said initial jobless claims slipped to 211,000 in the week ended December 28th, a decrease of 9,000 from the previous week’s revised level of 220,000.
The dip surprised economist, who had expected jobless claims to inch up to 222,000 from the 219,000 originally reported for the previous week.
With the unexpected decrease, jobless claims fell to their lowest level since hitting 209,000 in the week ended April 27, 2024.
“The claims data are consistent with a labor market that is strong enough to allow the Federal Reserve to proceed with rate cuts at a more measured pace in 2025,” said Nancy Vanden Houten, Lead US Economist at Oxford Economics.
She added, “Our baseline is for three rate cuts this year, although the risk following the mid-December FOMC meeting is for fewer cuts.”
The subsequent volatility may reflect below average volume, as many traders remain away from their desks following the New Year’s Day holiday on Wednesday.
Sector News
While most of the major sectors are showing only modest moves on the day, gold stocks have moved sharply higher, driving the NYSE Arca Gold Bugs Index up by 4.2 percent.
The rally by gold stocks comes amid an increase by the price of the precious metal, with gold for February delivery jumping $26 to $2,667 an ounce.
A surge by the price of crude oil is also contributing to considerable strength among oil producer stocks, as reflected by the 1.5 percent gain being posted by the NYSE Arca Oil Index.
Semiconductor stocks are also turning in a strong performance on the day, resulting in a 1.4 percent advance by the Philadelphia Semiconductor Index.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Thursday. China’s Shanghai Composite Index and Hong Kong’s Hang Seng Index tumbled by 2.7 percent and 2.2 percent, respectively, while Australia’s S&P/ASX 200 Index climbed by 0.5 percent.
Meanwhile, the major European markets have all moved to the upside on the day. While the U.K.’s FTSE 100 Index has jumped by 1.0 percent, the German DAX Index is up by 0.3 percent and the French CAC 40 Index is just above the unchanged line.
In the bond market, treasuries have pulled back near the unchanged line after seeing early strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 4.571 percent.
Business News
U.S. Stocks Seeing Considerable Volatility After Initial Advance
2025-01-02 16:33:45
