After an initial tepid start, U.S. stocks moved sharply higher Thursday, with the main benchmarks on track to wrap up the Easter-shortened week with modest gains.
Better-than-expected jobless claims pointed to continued strength in the labor market, setting the tone for Friday’s nonfarm payrolls.
The S&P 500 SPX, +0.37% was up eight points, or 0.4% at 2,067 with all of its 10 main sectors trading higher. The Dow Jones Industrial Average DJIA, +0.37% was up 60 points, or 0.3%, to 17,756. The Nasdaq Composite COMP, +0.15% added 9 points, or 0.2%, to 4,889.
U.S. stock markets are closed for Good Friday, so investors won’t get a chance to react to the highly anticipated jobs report until Monday, but there might be some hints at what the market thinks reflected in futures, which are briefly open. Read: When do markets close for Good Friday
Sandy Lincoln, chief markets strategist at BMO Global Asset Management, said he is optimistic about equities at this point.
“I believe the beta trade is over and alpha trade is coming, he said referring to finding corporations that are able to grow the top line in current economy.
He cautioned that there are no cheap assets. “Equities are not cheap, but fairly valued, while bonds are expensive,” he said.
The Federal Reserve has said it is looking closely at the labor market when determining the time for a rate hike, so the closely watched employment report set for Friday is seen as a significant economic gauge.
Thursday’s data: But before investors can relax over the three-day weekend, they have to chew their way through a round of economy releases on Thursday.
Initial jobless claims for the week ended March 28 fell by 20,000 to a seasonally adjusted 268,000, the levels last seen 15 years ago, the government agency said. The number is far below the forecasts by economists polled by MarketWatch.
The U.S. trade deficit sank 17% in February to the lowest level since 2009, largely because of cheaper oil, but exports also fell to a 2½ year bottom in a sign that a stronger dollar and a weak global economy are hurting American companies.
Also, Factory orders for February ticked up 0.2%.
Stocks to watch: CarMax Inc. KMX, +8.85% shares jumped more than 8% after the company reported on Thursday that its fourth-quarter profits surged 44%, as sales remained strong for the used-car retailer. The stock was the best performer on the S&P 500.
Its rival AutoNation Inc. AN, +1.57% shares rose sharply after sales jumped 10%.
Google Inc. GOOG, -1.23% GOOGL, -1.43% shares were hit on Thursday, making it the worst performer on the S&P 500, after news reports that the Europe’s competition regulators is preparing to move against the search giant in the next few weeks.
Other markets: European stocks ended mostly lower as investors there were also wary ahead of the long weekend and nonfarm payrolls. Most European stock markets are closed on Friday and Monday.
Asia markets closed sharply higher for the most part. Oil futures eased, while metals prices dropped across the board. The dollar traded mixed against other major currencies.