Wall Street gains as unemployment claims decline; Cigna slumps By Reuters

By Echo Wang

(Reuters) – Wall Street jumped on Thursday as U.S. unemployment claims declined further last week, while a drop in shares of health insurer Cigna dragged healthcare stocks lower.

Initial claims for state unemployment benefits fell by 14,000 to 385,000 in the week ended July 31, while layoffs dropped to their lowest level in more than 21 years last month as companies held on to their workers amid a labor shortage, the Labor Department’s report showed.

“We’re going to continue to see a little bit of a roller coaster market, with more volatility, more uncertainty, until there’s more clarity around consistent economic data, earnings, Fed policy and COVID-19 containment,” said Greg Bassuk, chief executive of AXS Investments in New York.

Focus will now shift to the jobs report for July on Friday. Analysts say a disappointing number might raise questions about an economic recovery, but it could also lead the Federal Reserve to remain accommodative.

Meanwhile, Robinhood Markets Inc (NASDAQ:) tumbled 13.9% and was set to snap a four-day rally fueled by interest from retail traders.

Ten of the 11 major S&P 500 sector indexes were higher in early afternoon trading, with only healthcare stocks in the red as Cigna Corp (NYSE:) slipped 11.4% after predicting a bigger hit to full-year earnings from the pandemic.

ViacomCBS (NASDAQ:) Inc jumped 6.9% as the company said it signed up the highest number of new streaming subscribers in the second quarter, and struck a multi-year deal with Comcast Corp (NASDAQ:)’s Sky to launch the Paramount+ streaming service in Europe.

By 1:40 p.m. ET, the rose 186.82 points, or 0.54%, to 34,979.49, the S&P 500 gained 17.03 points, or 0.39%, to 4,419.69 and the added 97.72 points, or 0.66%, to 14,878.26.

Concerns about the pace of economic growth and higher inflation have pressured the , but stellar corporate earnings so far have put it on track to end the week higher. The index is now flirting with a record closing high.

“Corporate earnings is what’s driving some of the more upbeatness around (today’s) market with mixed economic data and anticipation around tomorrow’s jobs report,” Bassuk said.

Fed Vice Chair Richard Clarida, a major architect of the central bank’s new policy strategy, said on Wednesday he felt the conditions for raising interest rates could be met by the end of 2022.

Advancing issues outnumbered declining ones on the NYSE by a 1.97-to-1 ratio; on Nasdaq, a 2.07-to-1 ratio favored advancers.

The S&P 500 posted 46 new 52-week highs and four new lows; the Nasdaq Composite recorded 101 new highs and 94 new lows.