Stock Market Today: 53-Year-Low Jobless Claims Lift the Market

Stocks logged a broad advance Thursday in the wake of the smallest weekly jobless claims number since John Lennon called it quits with the Beatles.

The Labor Department reported just 187,000 initial unemployment claims for the week ended March 19. That was 28,000 less than last week's revised claims report and the lowest such figure since September 1969.

"Before the pandemic, the number was hovering around 220,000, and we saw a complete recovery to these levels in the previous four weeks," says Alex Kuptsikevich, senior market analyst for forex broker FxPro. "The fresh data has marked a move into uncharted territory, indicating a further tightening in the labor market."

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In other Thursday news, U.S. durable-goods orders for March fell by 2.2%. That was far below expectations for growth of 0.6% and represents the first decline in five months. Nevertheless, various economic readings are "still showing positive momentum overall on an absolute basis with the economy well above pre-pandemic highs," says Peter Essele, head of portfolio management for Commonwealth Financial Network.

Semiconductor stocks were at the fore of Thursday's rally, led by Nvidia (NVDA, +9.8%), which said late Wednesday that it would explore using Intel (INTC, +6.9%) as a foundry for the manufacture of its chips.

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NVDA helped the Nasdaq Composite (+1.9% to 14,191) pace the major indexes, with the S&P 500 (+1.4% to 4,520) and Dow Jones Industrial Average (+1.0% to 34,707) also finishing well in the green.

Other news in the stock market today:

• The small-cap Russell 2000 gained 1.1% to 2,075.
• U.S. crude futures fell almost 2.3% to settle at $112.34 per barrel.
• Gold futures rose 1.3% to end at $1,962.20 an ounce.
• Bitcoin joined in Thursday's rally, jumping 4.1% to $43,946.42. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
• KB Home (KBH) slid 4.6% after the homebuilder reported fiscal first-quarter adjusted earnings of $1.47 per share on $1.40 billion in revenue – lower than the $1.52 per share and $1.49 billion analysts were expecting. Still, the figures were up 44% and 23$, respectively, year-over-year, and CEO Jeffrey Mezger said KBH is well-positioned to hit its full-year financial targets. "KB Home is not seeing a slowdown in demand despite price increases and the recent spike in mortgage rates," says BofA Securities analyst Rafe Jadrosich, who reiterated a Buy rating. He also said KBH's valuation "looks very compelling with shares trading at a 12% discount to our year-end 2022 tangible book value forecast."
• Freeport-McMoRan (FCX) rose 3.3% after Jefferies analyst Christopher LaFemina chimed in on the mining stock. "Freeport is in a strong competitive position in the midst of an earnings upgrade cycle that will take years to play out," LaFemina says. "The company has a clear path to grow its cash flow and capital returns and can create additional shareholder value by developing its unique organic growth pipeline." The analyst has a Buy rating on FCX, adding " the market continues to underappreciate the likely magnitude and duration of the ongoing cyclical upturn in copper." Several other basic materials stocks also traded higher today, including Cleveland-Cliffs (CLF, +12.0%), U.S. Steel (X, +6.5%) and Nucor (NUE, +4.3%).

The Third Year of the Bull Market

Yesterday marked the end of the bull market's second year, but investors might be in for a trying year three.

The post-COVID-19 bull market is the fastest bull market to double, at just under 18 months. However, "as this bull market reaches the third year of life, investors need to remember that year three of bull markets tend to be a little tamer, with the larger gains happening in year one and two," says Ryan Detrick, chief market strategist for LPL Financial.

"In fact, out of the 11 bull markets since World War II, we found that three of them ended during year three, while the ones that didn't end saw an average gain of only 5.2%."

In other words, at least historically speaking, we can expect some turbulence in the year to come.

The good news is that prepared investors can make the most of these challenges. Stocks that stave off sizzling inflation, for instance, or stocks that excel during periods of rising interest rates, afford investors relief from two of the market's biggest present pressures.

Meanwhile, a host of exchange-traded funds (ETFs) built to withstand this year's myriad challenges will also serve folks well. Our 22 best ETFs for 2022 include a little something for everyone: all-weather funds, ETFs constructed with inflation and rising interest rates in mind, and funds designed to withstand any additional complexities that could pop up soon enough.