Thursday’s Stock Market Close: US Equities Narrowly Mixed On Disappointing Jobs Report, Yields Jump

U.S. stocks closed narrowly mixed on Thursday as traders paused from the recent rally and mulled another grim jobless claims report.

The Dow Jones Industrial Average inched up 11.93 points to 26,281.82, while the S&P 500 fell 10.52 points to 3,112.35 and the Nasdaq Composite Index dropped 67.1 points to 9,615.81.

Thursday’s volume on the New York Stock Exchange totaled 6.44 billion shares with 1,603 issues advancing, 41 setting new highs, and 1,354 declining, with three setting new lows .

Active movers were led by American Airlines (AAL), Luckin Coffee Inc. (LK) and Genius Brands International Inc. (GNUS).

About 1.88 million Americans filed for unemployment insurance claims last week – more than analysts had expected. But it marked the first time in ten weeks that the figure fell below 2 million. Over the past 11 weeks, 43 million people have filed for unemployment.

Continuing claims totaled 21.5 million, a gain of 649,000 over the prior week.

Daniel Zhao, an economist and data scientist at Glassdoor, tweeted: “Good that the [claims] number is falling, but still elevated -- hardly a number to celebrate.”

However, Catarina Saraiva, an economics reporter, pointed out that “at least half a million [Pandemic Unemployment Assistance] unemployment claims (this is the program for self-employed and gig workers) are not reflected in the federal benefits tallies.”

The European Central Bank introduced a new €600 billion ($675 billion) bond buying program. Purchases will continue through the end of June 2021. The total pandemic emergency purchase program will be worth €1.35 trillion ($1.52 trillion).

The market is “focusing on signs that a reopening recovery -- juiced by federal spending and monetary easing -- is taking hold,” said Ed Yardeni, president and chief investment strategist at Yardeni Research. “The market is treating the recent calamity as if it were a natural disaster rather than a severe recession.”

Protests over the killing of George Floyd by police enter their tenth day.

“May could well end up being the turning point for the viral crisis. The month ended with the virus seemingly under control and with the economy reopening faster than expected,” wrote Brad McMillan, chief investment officer at Commonwealth Financial Network. “June will tell us whether that trend continues. But right now? Things look much better than we could have expected a month ago.”

“The market is trading on extreme optimism like I’ve never seen in my career,” said Phil Blancato, CEO of Ladenburg Thalmann Asset Management. “I’ve never seen the market trade on this kind of euphoria without real data to back it up. We’re looking at the worst data in our lifetime. Yet, here we are at all-time highs. Those two don’t normally go together. The market either knows something we don’t or we’re trading on extreme optimism.”

Overnight in Asia, markets finished mixed. The Shanghai Composite slipped 0.14%; Hong Kong’s Hang Seng edged up 0.17%; while Japan’s Nikkei-225 gained 0.36%.

In Europe markets finished lower, as Britain’s FTSE-100 fell 0.64%, while France’s CAC-40 dropped 0.21% and Germany’s DAX slipped 0.45%.

Crude oil futures slipped 0.56% at $37.08 per barrel, Brent crude fell 0.58% at $39.76. Gold futures rose 1.07%.

The euro gained 0.83% at $1.1327 while the pound sterling edged up 0.11% at $1.259.

The yield on the 10-year Treasury surged 7.75% to 0.82% while yield on the 30-year Treasury jumped 4.71% to 1.624%.