The major domestic equity indexes were in positive territory for a third straight session on Thursday as trade talks with China were “moving along nicely,” reviving hopes that the two countries can resolve their trade dispute.
Adding to the upbeat mood, the latest round of results from companies was mostly positive.
After the bell, shares of Apple fell about 7.0 percent, pushing its market capitalization below $1 trillion. In its earnings announcement the company said sales for the crucial holiday quarter could miss Wall Street expectations. The stock ended the regular session up 1.5 percent.
The technology index was up 1.2 percent, as it continues to recover from the recent selloff.
The trade-sensitive S&P industrial sector rose 1.7 percent, with Boeing and Caterpillar among companies leading the gains.
Despite ending higher on Wednesday, the S&P 500 closed out its worst month in seven years, following fears of a widening global trade dispute, rising borrowing costs, and earnings growth that may slow more than forecast in 2019.
The S&P materials index rose 3.0 percent, with DowDuPont up 8.1 percent after it reported strong results and plans for a $3 billion share buyback.
Also helping were robust earnings reports from three Apple suppliers, NXP Semiconductors, Dialog Semiconductor and Qorvo.
Technology-related stocks, which have led the stock market’s bull run in recent years, helped lead the selling in October, with the S&P 500 tech index down 8 percent in the month.
The Nasdaq is up 5.4 percent for the last three sessions, its largest three-day gain since February 2016.
Of the 348 companies in the S&P 500 that have reported results so far, 77 percent have reported earnings that have exceeded analysts’ expectations, pushing the aggregate third-quarter earnings growth estimate for S&P 500 companies to 26.2 percent, according to IBES data from Refinitiv.
Friday brings the U.S. monthly jobs report for October. Investors will look for further signs of tightening labor market conditions.
Approximately 9.1 billion shares changed hands on the major domestic equity exchanges, as compared to the 8.7 billion share daily average for the past 20 trading days.
The Day’s Economic News
New applications for unemployment aid fell last week, while the number of individuals receiving benefits was the lowest in more than 45 years as labor market conditions tightened further.
Other data on Thursday showed worker productivity slowing in the third quarter, but still growing at a relatively decent clip and compensation surging, adding to recent reports and anecdotal evidence that the strong labor market was pushing up wage gains.
The economy’s upbeat outlook was tempered by news that manufacturing activity slowed in October as a measure of new orders dropped to its lowest level in 1-1/2 years.
According to a report released by the Labor Department on Thursday morning, initial claims for state unemployment benefits fell by 2,000 claims to a seasonally adjusted 214,000 claims for the week ended October 27.
Data for the prior week was revised to show 1,000 more claims received than previously reported. Claims fell to 202,000 claims during the week ended September 15, the lowest level since November 1969.
The Labor Department said claims for North Carolina continued to be affected by Hurricane Florence, while Hurricane Michael impacted those for Florida and Georgia.
The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose by 1,750 claims to 213,750 claims last week.
The claims data has no bearing on October’s employment report, which is scheduled for release on Friday, as it falls outside the survey period.
Payrolls increased by 134,000 in September, the fewest in a year. The unemployment rate is forecast unchanged at a near 49-year low of 3.7 percent in October.
The labor market is viewed as being near or at full employment. There are a record 7.14 million open jobs in the economy, suggesting a shortage of skilled workers.
Thursday’s claims report also showed the number of people receiving benefits after an initial week of aid declined by 7,000 claims to 1.63 million claims for the week ended Oct. 20, the lowest level since July 1973. The four-week moving average of the so-called continuing claims decreased 6,250 claims to 1.64 million claims, the lowest level since August 1973.
In a second report on Thursday, the Labor Department said nonfarm productivity, which measures hourly output per worker, increased at a 2.2 percent annualized rate in the third quarter.