By Johann M Cherian and Purvi Agarwal
(StuffsEarth) – The Nasdaq and the S&P 500 inched up on Thursday after a services activity survey allayed some fears of a slowdown in economic activity, while focus continues to be on the Federal Reserve’s interest rate cut that is expected later this month.
An Institute for Supply Management survey showed services sector activity, a large part of the U.S. economy, rose to 51.5 in August, above expectations of 51.1.
Aiding sentiment, the number of Americans filing new applications for jobless benefits declined last week, according to a Labor Department report.
On the flip side, ADP National Employment data showed private employers hired the fewest number of workers in 3-1/2 years in August, ahead of Friday’s crucial nonfarm payrolls figure.
Traders’ bets for a 25-basis point reduction in interest rates at the Fed’s September meeting now stand at 55%, according to the CME Group’s (NASDAQ:) FedWatch Tool. Bets for a larger 50-bps cut rose to 45% from 34% a week earlier.
“The one positive you could take away is that layoffs seem to remain somewhat muted. If you look at initial claims data, hiring has fallen off of a cliff,” Ross Mayfield, investment strategist at Baird, said.
At 10:11 a.m. the fell 12.19 points, or 0.03%, to 40,962.78, the S&P 500 gained 15.33 points, or 0.28%, to 5,535.40 and the gained 141.92 points, or 0.83%, to 17,226.22.
The tech-heavy Nasdaq outperformed, led by Nvidia (NASDAQ:) that rose 2.5% after the AI chip firm fell more than 11% in the previous two sessions.
Other megacap stocks also rebounded, with Amazon.com (NASDAQ:) rising 3.2%, while Apple (NASDAQ:) and Alphabet (NASDAQ:) added more than 1.2% each.
September has been historically weak for U.S. equities, with the benchmark S&P 500 down about 1.2% for the month on average since 1928. The index is down more than 2% so far this week and tech stocks have fallen over 3%.
Six of the 11 S&P 500 sectors traded higher. Consumer discretionary stocks rose 1.9%, with Tesla (NASDAQ:) among the top boosts.
The electric-vehicle maker’s shares jumped 6% after it said it will launch the full self-driving advanced driver assistance software in the first quarter next year in Europe and China, pending regulatory approval.
C3.ai (NYSE:) tumbled 11% after the AI software firm missed quarterly subscription revenue estimates.
Frontier Communications (OTC:) dropped 9% after Verizon (NYSE:) said it would buy the company in an all-cash deal worth $20 billion.
JetBlue Airways (NASDAQ:) jumped 8.2% after the carrier raised its third-quarter revenue forecast.
Leading up to the U.S. presidential elections, Goldman Sachs analysts said Democratic presidential candidate Kamala Harris’ proposed corporate tax hike could lower earnings for companies on the by about 5%, while Republican candidate Donald Trump’s proposed relief would boost earnings by about 4%.
Advancing issues outnumbered decliners for a 1.78-to-1 ratio on the NYSE and a 1.48-to-1 ratio on the Nasdaq.
The S&P 500 posted 35 new 52-week highs and seven new lows, while the Nasdaq Composite recorded 23 new highs and 56 new lows.
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