Midday Report: US Stocks Rise as Technology Leads Gainers; Initial Jobless Claims Miss Forecast but New Homes Sales Jump

Thursday, September 24, 2020 1:12 PM | MT Newswires

US stocks rose while oil prices fell as a higher-than-expected decline in weekly initial jobless claims coincided with an unexpected jump in new home sales in August.

The Dow Jones Industrial Average rose by 105.97 points, or 0.4%, to 26,869.10, after trading lower earlier in the session. S&P 500 climbed by 0.5% to 3,254.40 and Nasdaq added 0.8% to 10,722.83. Apart from technology, the utilities and consumer staples categories were among the top performers after midday on Thursday while health care declined.

Applications for initial jobless benefits rose by 4,000 in the week through Sept. 19 to 870,000, the Department of Labor said on Thursday. That was above market estimate of 840,000, according to data compiled by Trading Economics. The previous week's claims were revised higher by 6,000 to 866,000.

"Even as nearly half of payroll losses have been recovered, it is likely further progress will be more modest given slowing momentum in economic activity recently," Rubeela Farooqi, chief US economist at High Frequency Economics, said.

New home sales were at an annual rate of more than 1 million in August from an upwardly revised 965,000 in July, the Census Bureau said Thursday. Analysts polled by Bloomberg expected a headline of 890,000.

The West Texas Intermediate futures fell by 0.3% to $39.83. On the COVID-19 front, a report from Commerzbank said the incidence of infection was continuing to rise in the European Union, with Spain and France data showing that the infection rate is still rising.

In the UK, the number of COVID-19 cases was doubling in about seven-eight days, forcing the government to introduce new restrictions such as guidance to work from home if possible, limiting closing times for pubs and restaurants, and curbing the size of social gatherings.

In US company news, Darden Restaurants (DRI) rose 7.4% after its earnings in the fiscal first quarter slowed year-on-year, but still topped expectations. It also reinstated its quarterly dividend. Shares were the biggest gainer on S&P 500. EW Scripps (SSP) jumped 14% following the television broadcaster's plan to buy ION Media, a national broadcast network, for $2.65 billion.

Shares of Accenture (ACN) dropped 6.8%, the second-worst performer on S&P 500, after fiscal fourth-quarter results missed analysts' projections and the consulting firm guided for 2021 earnings below the Street's forecasts.

In the precious metals markets, gold was 0.3% higher to $1,873.40 an ounce, while silver was down 0.6% to $22.96 an ounce and copper was down 1% to $2.96 per pound.

Among energy ETFs, the United States Oil Fund rose 1% to $28.30 and the United States Natural Gas Fund was up 2.3% to $12.88. Among precious-metal funds, the Market Vectors Gold Miners ETF was up 1.6% to $38.30 and SPDR Gold Shares were up 0.5% to $175.72. The iShares Silver Trust was up 1.4% to $21.50.

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