Investing.com-- The S&P 500 closed higher Thursday as better-than-feared labor market data cooled worries that a recession may be on the horizon.
At 16:00 ET (20:00 GMT), the Dow Jones Industrial Average rose 683 points, or 1.8%, the S&P 500 climbed 2.3%, and the NASDAQ Composite rose 2.9%.
Solid jobless claims allay recession fears
Data released earlier Thursday showed the number of Americans filing new applications for unemployment benefits came in at 233,000 for the week ended Aug. 3.
This was below the 241,000 expected, and a reduction from the revised 250,000 the prior week, which was an 11-month high. The report eased jitters about weakness in the labor market following last week's soft nonfarm payrolls report.
The "unexpected drop in jobless claims offers a welcome positive indication of labor market conditions, softening concerns of more precipitous weakness in the aftermath of a somewhat disappointing jobs report," Stifel said.
The main Wall Street indices have suffered steep losses over the past few weeks, with the Nasdaq having entered correction territory, on increasing fears of a recession, following a slew of weak readings on the labor market and business activity.
Fed's Barkin cools big rate-cut bets
Richmond Fed president Thomas Barkin on Thursday downplayed calls for urgent rate-cutting action, and said the Fed has time to wait to assess the pace of slowing in the economy.
The Fed has "some time" to assess whether this is an economy that's "gently moving into a normalizing state ... or one where you really do have to lean into it," Barkin said Thursday at a virtual event put on by the National Association for Business Economics.
Bets on a 50bps cut in September fell to 56% from 72% a day earlier, according to Investing.com's Fed Rate Monitor Tool.
Earnings continue to emerge
Eli Lilly (NYSE:LLY) stock soared 9% after the drug maker raised its annual profit forecast and sales of its popular weight-loss drug Zepbound crossed $1 billion for the first time in a quarter.
Bumble (NASDAQ:BMBL) stock slumped 29% after the online dating agency cut its annual revenue growth forecast, sparking worries about its growth plans.
"The path to returning to year over year revenue growth remains unclear which in-turn provides limited valuation support [for the share price," UBS said in a Thursday note.
Warner Bros Discovery (NASDAQ:WBD) stock fell 9% after the entertainment giant reported a quarterly net loss of $10 billion, announcing it has written down the value of its traditional television networks by $9.1 billion, a dramatic recognition of how fast streaming is eroding the cable business model.
"The likely loss of NBA rights is expected to drive downside to networks advertising and affiliate estimates," UBS said as it cut its forecast on the company's EBITDA for 2024 to $9.1B from $9.5B.
Under Armour Inc A (NYSE:UAA) jumped 19% after reporting quarterly earnings topped Wall Street estimates and the sportswear giant full-year earnings guidance also surprised to the upside.
(Peter Nurse, Ambar Warrick contributed to this article.)