The Nasdaq and S&P 500 closed at record levels on Thursday as investors digested more quarterly earnings results and new data on the labor market’s recovery and a further decline in U.S. unemployment claims last week.
The number of Americans filing new claims for unemployment benefits declined by 14,000 to 385,000 in the week ended July 31, while layoffs dropped in July to their lowest level in just more than 21 years.
The S&P 500 advanced to log a record closing high. Both the Dow and Nasdaq also ended higher, with shares of cyclical energy and financial stocks, as well as travel- and leisure-related firms contributing heavily to the gains.
Nine of the 11 major S&P 500 sector indexes rose, with healthcare stocks in the red as Cigna Corp slipped 10.9% after predicting a bigger hit to full-year earnings from the pandemic.
Focus will now shift to the jobs report for July on Friday. Analysts say a disappointing number might raise questions about an economic recovery, but it could also lead the Federal Reserve to remain accommodative.
Over the past month, defensive sectors including utilities and healthcare have outperformed as concerns over the spread of the Delta variant resurged. For the year-to-date, however, the cyclical sectors of the S&P 500, including energy and financials, have remained the major outperformers, consistent with investors’ convictions that this year would be one of recovery for the broader economy relative to last year’s lows.
The Dow Jones Industrial Average rose 271.58 points, or 0.78%, to 35,064.25, the S&P 500 gained 26.44 points, or 0.60%, to 4,429.1 and the Nasdaq Composite added 114.58 points, or 0.78%, to 14,895.12.
Advancing issues outnumbered declining ones on the NYSE by a 2.06-to-1 ratio; on Nasdaq, a 2.26-to-1 ratio favored advancers.
The S&P 500 posted 52 new 52-week highs and 4 new lows; the Nasdaq Composite recorded 111 new highs and 103 new lows.