Stocks Shake Off Fed Uncertainty, Rise in Interest Rates…..
U.S. equities rallied into the close to finish near the highs of the day, as investors appeared to shake off the persistent rise in interest rates. The markets also digested some earnings reports, as shares of Dow member Salesforce jumped after topping expectations, and Macy’s also moved solidly higher after besting the Street’s forecasts. However, disappointing guidance from Best Buy took some of the luster of its earnings beat. Elsewhere, the economic calendar added to the Fed uncertainty, as jobless claims unexpectedly dipped, while Q4 productivity was revised lower and unit labor costs were adjusted to the upside. Treasury yields continued their ascent, and the U.S. dollar gained solid ground, while crude oil prices edged higher in choppy trading, and gold was slightly lower. Asia finished mixed, and Europe posted gains across the board, as the global markets continued to wrestle with recent data.
The Dow Jones Industrial Average rallied 342 points (1.1%) to 33,004, the S&P 500 Index added 30 points (0.8%) to 3,981, and the Nasdaq Composite was up 84 points (0.7%) to 11,463. In moderate volume, 4.2 billion shares of NYSE-listed stocks were traded, and 5.2 billion shares changed hands on the Nasdaq. WTI crude oil gained $0.47 to $78.16 per barrel. Elsewhere, the gold spot price lost $2.20 to $1,843.20 per ounce, and the Dollar Index gained 0.4% to 104.93.
Jobless claims unexpectedly dip, productivity and labor costs revised unfavorably…..
Weekly initial jobless claims came in at a level of 190,000 for the week ended February 24, below the Bloomberg consensus estimate of 195,000 and the prior week’s unrevised 192,000 level. The four-week moving average rose by 1,750 to 193,000, though continuing claims for the week ended February 18 declined by 5,000 to 1,655,000, south of estimates calling for 1,669,000. The four-week moving average of continuing claims increased by 1,250 to 1,671,500.
Final Q4nonfarm productivity was revised lower to a 1.7% increase on an annualized quarter-over-quarter (q/q) basis, from an initial 3.0% estimated rise, and versus estimates of a revision to a 2.5% gain. Q3 productivity was negatively adjusted to a 1.2% rise. Labor productivity, or output per hour, is calculated by dividing real output by hours worked and is a major contributor to the economy’s long-term health and prosperity. Unit labor costs were adjusted to a 3.2% q/q increase, from the preliminary rise of 1.1%, and versus forecasts of a revised 1.6% gain. Unit labor costs were upwardly adjusted in Q3 to an increase of 6.9%.
Treasury rates rose, as the yield on the 2-year note gained 1 basis point (bp) to 4.90%, while the yields on the 10-year note and the 30-year bond increased 7 bps to 4.07% and 4.02%, respectively.
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