US stocks rose in late morning trading on Thursday to rebound from early morning weakness after US jobless claims data came in stronger than expected and technology stocks reversed earlier losses to trade higher.
According to data from the US government, the number of people filing new claims for unemployment benefits rose by a marginal 3000 to 265,000- well below the forecasts of analysts polled by the Wall Street Journal.
The total number of people receiving jobless claims still remains at a 15 year low- an indication that the US labor market remains steady despite a slowdown in economic growth.
The S&P 500 index was up 5 points or 0.3% in late morning trading at 2,085 to reverse a 13.97 point or 0.65% decline at the beginning of trading.
The benchmark index was spurred higher by a rebound in technology shares led by Microsoft Corp and Yahoo Inc as they rose from their deepest drops in more than 6 weeks on Wednesday.
Microsoft Corp rose by more than 1.5% while Yahoo Inc jumped by more than 5% to give the S&P and the Nasdaq their biggest boosts as the first quarter earnings reporting season winds down.
The Dow Jones Industrial Average advanced by 76 points or 0.4% to 17,894 points to rebound from a 0.71% decline earlier in the day.
The technology heavy Nasdaq Composite was 20 points or 0.54% higher at 4900.1 points on a rally in technology stocks. The index recorded more than 32 new highs and 46 new lows.
Analysts expect the markets to trade sideways for some time.
“Markets have rallied so much, that there are excesses which either need to be flushed out in a correction or trade sideways for the rest of the year and the let the economy catch up,” Colin Cieszynski, chief market strategist at CMC Markets, told Market Watch.
“At this points, the reaction to the jobs report will depend on whether people think a strong reading is good news because the economy is doing better or whether people think a weak reading is good news because the interest rates will remain low for longer.”
To contact the reporter of the story: Jonathan Millet at email@example.com