Stocks Rebound Ahead of January Jobs Report
The main indexes recovered from Wednesday's widespread selling as investors looked ahead to key jobs data.
Stocks closed higher Thursday, bouncing back from Wednesday's Fed-fueled selloff. Ahead of tonight's batch of Big Tech earnings from Amazon.com (AMZN, +2.6%), Apple (AAPL, +1.3%) and Meta Platforms (META, +1.2%), market participants took in some mixed economic data and dismal guidance from a one-time pandemic darling.
On the economic front, the Labor Department said initial jobless claims jumped to a three-month high of 224,000 last week. The data comes ahead of tomorrow's January jobs report, which will be "a key input" in the Fed's decision-making process, says Morgane Delledonne, head of investment strategy for Europe at Global X.
Meanwhile, data from both S&P Global and the Institute for Supply Management showed manufacturing activity improved from December to January. "Manufacturers have started the year with a spring in their step," said Chris Williamson, chief business economist at S&P Global Market Intelligence. "Business optimism about the year ahead has surged to its highest since early 2022 thanks to a jump in demand."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Still, Williamson says the data showed higher costs related to supply delays that could result in "renewed upward pressure on consumer prices" in the months ahead if this trend persists.
That last point is particularly important following this week's Fed meeting. While the central bank kept the federal funds rate unchanged again, it indicated it is in no rush to start cutting rates as long as inflation remains elevated.
Peloton plunges on weak guidance
In single-stock news, Peloton Interactive (PTON) plunged 24.3% after the athletic equipment maker, which gained major market share at the outset of the pandemic, reported earnings. While Peloton disclosed a narrower-than-expected loss for its fiscal second quarter on higher-than-anticipated revenue, it gave disappointing fiscal Q3 and full-year guidance.
"Our outlook is tempered by uncertainty surrounding our ability to efficiently grow Paid App subscribers and the performance of other new initiatives, as well as an uncertain macroeconomic outlook," wrote Liz Coddington, chief financial officer of Peloton, in the report.
Merck (MRK) was another post-earnings mover, only shares of the blue chip stock jumped 4.7%. The drugmaker disclosed fourth-quarter earnings of 3 cents per share on $14.6 billion in revenue, both figures higher than analysts were expecting.
New York Community Bancorp shares keep falling
Elsewhere, New York Community Bancorp (NYCB) continued to slide. Shares of the commercial real estate (CRE) lender slumped 11.3% today, bringing its two-day decline to 44.7%.
The selloff began Wednesday after the company said it swung to an unexpected per-share loss in the fourth quarter as loan losses surged. This caused the bank, which early last year acquired failed regional lender Signature Bank, to increase its loan-loss reserves. In order to boost its capital, NYCB also slashed its quarterly dividend to 5 cents per share from 17 cents per share.
BofA Securities analyst Ebrahim H. Poonawala says Q4 could mark a "kitchen-sink quarter" for the bank stock, but "the Street will likely need proof points that the worst impacts of credit/liquidity/capital builds are now reflected in earnings outlook and that management and regulators are in sync with NYCB’s balance sheet positioning." The analyst kept a Buy rating on NYCB.
As for the main indexes, the Dow Jones Industrial Average gained 1.0% to 38,519, the S&P 500 rose 1.3% to 4,906, and the Nasdaq Composite added 1.3% to 15,361.
Related content
- ARK Invest's Cathie Wood is Searching for the Next Big Thing
- Finfluencers Are a Rising Trend. But Should You Trust Their Advice?
- More Americans Are Seeing Wages Grow Faster Than Prices
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor 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.
-
A Guide to Music Streaming Services
Deals Our guide to music streaming services from Spotify to Amazon Music, Tidal to Apple Music and how to find music streaming deals.
By Vaishali Varu Published
-
Stock Market Today: Markets Reflect Global Uncertainty
Exuberance fades as investors confront micro challenges and a murkier macro environment.
By David Dittman Published
-
Stock Market Today: Markets Reflect Global Uncertainty
Exuberance fades as investors confront micro challenges and a murkier macro environment.
By David Dittman Published
-
What's Better Than Investing in Crypto? These 'Boring' Picks
Cryptocurrency may be good for a thrill, but older investors are better off with assets like bonds, guaranteed annuities, CDs and maybe dividend-paying stocks.
By Ken Nuss Published
-
Four Actions to Lessen Retirement Stress for Women (and Men)
Saving for retirement is anxiety-inducing for everyone, especially women. Following this four-part action plan can help improve your financial security.
By Nicole Stokes, CLTC®, CLU®, ChFC®, M.A., RICP® Published
-
Year-End Retirement Tax Planning Actions if You Have $1 Million or More
Consider implementing these four strategies before December 31 to potentially improve your tax situation for this year and the future.
By Joe F. Schmitz Jr., CFP®, ChFC® Published
-
Five Simple Strategies to Ensure a Happy Retirement
Employer retirement plans are great, but individual responsibility plays a huge role in retirement success. Here's how to empower yourself.
By Romi Savova Published
-
25 Financial Moves to Consider Before December 31
Tidying up your financial house before the New Year kicks off will put you in a great position to have a financially satisfying and successful 2025.
By Jonathan I. Shenkman, AIF® Published
-
Five Side Hustles You Could Turn Into a Full-Time Business
You might be able to capitalize on your expertise in ways you haven't thought of, possibly even leading to quitting your 9-to-5 job to do what you love.
By Anthony Martin Published
-
Stock Market Today: Nasdaq Nabs New High After Jobs Data
The S&P 500 also closed at its highest level ever, while the Dow Jones Industrial Average was pressured by another down day for UnitedHealth stock.
By Karee Venema Published