Stock Market Today: Stocks Bounce Back After Latest Jobs Data

Today's weekly jobless claims update gave investors hope that the labor market might finally be cooling.

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With just two sessions left in 2022, bulls finally got the stock market surge they've been hoping for. The major market indexes staged a hearty rally Thursday, helped by a bad-news-is-good-news reading on the labor market in vapor-thin trading volume. 

The proximate cause for Thursday's rally came courtesy of an uptick in weekly jobless claims (opens in new tab). The Labor Department reported that initial jobless claims rose by a more-than-expected 9,000 to 225,000 in the week ended Dec. 24. The squeaky tight labor market is a sticking point in the Federal Reserve's efforts to slow the economy and bring down inflation. Any sign that hiring is cooling is considered a step in the right direction for the central bank to ease up on rate hikes

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Bargain hunters and fund managers looking to add a little window dressing to their year-end returns also helped give equities a lift on Thursday. December is historically one of the strongest months of the year for stocks, but heading into today's trading, the major market indexes were carrying month-to-date losses ranging from 5% to 11%. It was only fitting that some of the day's biggest gainers were stocks that suffered outsized losses this month, including Apple (AAPL (opens in new tab), +2.8%), Tesla (TSLA, +8.1%) and Amazon.com (AMZN (opens in new tab), +2.9%).

At the close, the Dow Jones Industrial Average was up 1.1% at 33,220, the S&P 500 Index was 1.8% higher at 3,849, and the Nasdaq Composite had gained 2.6% to 10,478.

The Small-Cap Stocks to Watch in 2023

"2022 was an exceptional year and not in a good way," says Brad McMillan, chief investment officer for Commonwealth Financial Network. And what made this year so difficult, he says, were issues that no one foresaw back in January: Sizzling inflation and rising interest rates. McMillan says that among the many lessons this year has taught investors, "perhaps [the] most important is that one year – no matter how good or bad – doesn't achieve or derail your goals." 

For investors who've come to realize in 2022 that they prefer a lower-risk, diversified approach, these bear market ETFs or low-volatility ETFs might be a better choice for next year. And for those who've discovered they actually have a higher tolerance for risk? These top small-cap stocks are priced for outsized returns in 2023. 

Karee Venema
Contributing Editor, Kiplinger.com

With over a decade of experience writing about the stock market, Karee Venema is an investing editor and options expert at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at Schaeffer's Investment Research. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.