S&P 500 Climbs to New Record High After Latest Economic Updates

Barry Adams
26 Sep, 2024
New York City

Stocks rebounded on Wall Street following better-than-expected economic data, and investors increased risk exposure. 

The S&P 500 index traded at a new intraday high, and the Nasdaq Composite approached its record high reached in July. 

Market sentiment improved after the latest weekly jobless claims, durable goods orders, and GDP growth revisions met investor expectations. 

Initial weekly jobless claims decreased 4,000 to 218,000 at the end of the last week, the U.S. Department of Labor reported Thursday. 

Jobless claims dropped to a 4-month low, and continuing claims rose 13,000 to 1.834 million in the previous week.

Despite the recent decline in jobless claims, labor market conditions have softened from a year ago and earlier months in the year as employers avoid adding new staff. 

Investors are now awaiting the release of monthly nonfarm payroll data, which could provide additional insights into the current conditions of the labor market. 

 

U.S. Q2 GDP Growth Confirmed at 3.0% 

The second quarter GDP growth estimate was unrevised at 3.0% in the third estimate and higher than the 1.6% increase in the first quarter, the Bureau of Economic Analysis reported Thursday. 

The GDP update primarily reflected upward revisions to private inventory investment (8.3% from 7.5%) and federal government spending (4.3% from 3.3%) that were offset by downward revisions to nonresidential fixed investment (3.9% from 4.6%) and exports (1% from 1.6%). 

Imports, which are a subtraction in the calculation of GDP, were revised. 

The government agency also revised its GDP growth estimate in the first quarter to 1.6% from the previous estimate of 1.4%, primarily reflecting an upward revision to consumer spending that was partly offset by downward revisions to private inventory investment and residential fixed investment.

 

Durable Goods Orders Unchanged In August 

In other economic news, new orders for manufactured durable goods were nearly unchanged from the previous month in August, the U.S. Census Bureau reported Thursday. 

New order growth slowed sharply from the 9.8% surge in July, which was the highest rate of growth in four years. 

The better-than-expected orders contrasted with the growing pessimism about manufacturing sector activities, suggesting that the current slowdown may be temporary. 

New orders excluding transportation increased 0.5%, and excluding volatile defense goods eased 0.2%. 

On an annual basis, new orders for durable goods declined 1.3%. 

Non-defense capital goods orders declined 1.3% from the previous month in August, and excluding volatile aircraft orders rose 0.2%. 

From the previous year, non-defense capital goods orders dropped  6.5%, and excluding aircraft rose 0.3%. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index increased 0.5% to 5,748.64, the Nasdaq Composite rose 0.8% to 18,209.77, and the Russell 2000 index rose 1.1% to 2,219.61. 

The yield on 2-year Treasury notes edged higher to 3.59%, 10-year Treasury notes inched up to 3.77%, and 30-year Treasury bonds inched higher to 4.12%.

WTI crude oil increased $2.55 to $67.13 a barrel, and natural gas prices edged down 1 cent to $2.80 a thermal unit.

Gold rose by $8.15 to $2,664.11 an ounce, and silver increased by $0.20 to $32.02.

The dollar index, which weighs the US currency against a basket of foreign currencies, edged higher to 100.77.

 

U.S. Stock Movers

Micron Technology soared 17% to $111.87 after the advanced semiconductor company reported better-than-expected quarterly results.

The company also estimated higher revenue and earnings in the current quarter. 

Southwest Airlines Company increased 9.8% to $31.26 after the regional airline announced its stock buyback plan of $2.5 billion. 

The company also said its third quarter revenue is expected to rise as much as 3% compared to its previous estimate of a decline of 2%. 

The company also announced a host of other changes to its business model and named Bob Fornaro, who previously led Spirit Airlines, to its board of directors. 

China-linked stocks soared for the third day in a row after China's politburo announced their commitment to revive economic growth to 5%. 

JD.com, Alibaba Group, Tencent Holdings, and Baidu jumped between 5% and 9%.