|Delayed - 01/15 05:18:49 pm|
US Stocks Rise in Early Trading Amid Expectations of Surge in Consumer Spending in Spring
|01/14/2021 | 10:48am|
Initial jobless claims jumped to 965,000 from 784,000 in the week ended Jan. 9. It was the highest weekly total since August, Stifel Economics said. That was well above an analyst consensus compiled by Econoday for 790,000 claims.
All three main indices were higher, compared with mixed and near-flat results for the previous two sessions. The Dow was higher amid expectations that with accelerated immunization and as herd immunity advances pandemic restrictions will give way to large consumption gains.
"As the disease fades and restrictions are permanently lifted, we expect a massive surge in consumers' spending, especially on services. By April, households will have accumulated savings balances of $2 trillion, almost 10% of GDP," according to Ian Shepherdson, chief economist at Pantheon Macroeconomics.
The savings will combine with possible additional stimulus payments and extended unemployment benefits that may be soon approved by a Democrat-controlled Senate, Shepherdson said. Herd immunity likely will be reached by May, he added.
The biggest increase in the Dow was posted by Intel (INTC). The company rose 3.8% as it erased most of its losses on Wednesday, when the company confirmed media reports that Chief Executive Bob Swan would step down and be succeeded by VMWare (VMW) CEO Pat Gelsinger.
Other Dow Jones Industrial Average Index stocks that saw the highest increases were Johnson and Johnson (JNJ) and Boeing (BA), gaining 1.6% and 2.3%, respectively.
Energy was the sector with with the biggest rise by far in the Standard & Poor's 500 with a 1.6% increase, followed by industrials with a 0.7% gain. Utilities was the biggest decliner with a 0.6% drop.
In company stocks, Ballard Power Systems (BLDP) fell 6.1% after National Bank Financial downgraded it to sector perform from outperform.
FuelCell (FCEL) fell 9.6% after JPMorgan downgraded the company to underweight From neutral.
Twist Bioscience Corp. (TWST) rose 6.3% after the biotechnology company focused on developing synthetic DNA said it started shipping its new synthetic RNA reference controls.
The Dow was 0.4% higher while the Nasdaq Composite rose more than 0.6%. The S&P added 0.3%.