Stocks open higher after weak initial claims data

Stocks opened Thursday’s trading session higher following labor market data that was weaker than expected and ahead of Friday morning’s key February jobs report.

Shortly after the opening bell the S&P 500 (^GSPC) was up 0.2%, Dow Jones Industrial Average (^DJI) was higher by 0.4%, and the Nasdaq Composite (^IXIC) was up 0.1%.

The weekly report on initial filings for unemployment insurance Thursday morning showed 211,000 claims were filed last week, an increase of 21,000 from the prior weak and what economists at Oxford Economics called the “first hint of weakness” in this data.

“The jump in jobless claims to 211k last week from 190k is the first sign of weakness in the claims data this year but is still well short of the 300k+ level that would be consistent with a recession,” Michael Pearce, Lead U.S. Economist at Oxford Economics wrote in a note to clients. “As the Fed presses ahead with more rate hikes, we expect layoffs to eventually rise significantly.”

Thursday’s trading session will serve as a bridge between two eventful days of testimony from Federal Reserve Chair Jerome Powell and Friday morning’s key February jobs report.

Stocks finished Wednesday’s trading session mixed after a sell-off Tuesday that was triggered by comments from Powell suggesting the Fed will need to raise rates higher than previously forecasted amid stubborn inflation.

“I was surprised by Powell’s willingness to accelerate the policy tightening pace, but I am not surprised by the admission that terminal rates will need to rise further,” said Neil Dutta, head of economics at Renaissance Macro.

“At present, the futures market is priced for a [50 basis point] move in March. There is no point cracking open a door if you don’t intend to walk through.” Data from the CME Group shows markets placing an 80% on the Fed raising rates by 0.50% later this month.

Federal Reserve Chair Jerome H. Powell testifies before a House Financial Services hearing on

Federal Reserve Chair Jerome H. Powell testifies before a House Financial Services hearing on “The Federal Reserve’s Semi-Annual Monetary Policy Report” on Capitol Hill in Washington, U.S., March 8, 2023. REUTERS/Kevin Lamarque

Elsewhere in markets, the price of crude oil was flat early Thursday near $76.70 a barrel after falling earlier this week from closer to $80.

Investors will also keep a close eye on the Treasury market, where the 10-year yield was standing near 3.97% early Thursday with a deepening inversion of the yield curve garnering headlines earlier in the week.

In single-stock news, shares of Silvergate (SI) were in focus early Thursday after the bank said late Wednesday it would liquidate and wind down its operations after suffering heavy losses amid huge deposit outflows from its digital asset client base.

Shares of Silvergate, which have lost more than 95% over the last year, were down 38% in early trading.

Other stocks on the move early Thursday included MongoDB (MDB), down about 9% following a disappointing quarterly report.

On the flip side, shares of Asana (ASAN) were up as much as 20% shortly after the opening bell.

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