US stocks increased on Thursday as investors sought to snap up bargains in tech stocks, looking past a rise in Covid-19 cases in China following the country’s relaxation of its pandemic policies.
This week, Wall Street has faltered as the rapid spread of coronavirus in China has increased the risks to the global economy. However, there hasn’t been any foundational change to that outlook, and Thursday’s move is not likely to mark a change in the market’s overall direction.
The benchmark S&P 500 increased 1.7% and Nasdaq Composite 2.6% as investors bought tech stocks like Tesla, Netflix, and Apple. On Thursday, trading volumes were thinner with many investors on holiday, which means that relatively small trades can alter or amplify trends.
The Tesla shares had an 8.1% jump, having dropped more than a third this month on fears that the electric carmaker’s chief executive, Elon Musk, was distracted by his purchase of Twitter. Apple, which increased by 2.8% on Thursday, fell by 12% in December as investors worry about disruptions to its manufacturing operations in China. Also, Netflix climbed 5.1%.
On Thursday morning, US stocks might have also been bolstered by data showing that weekly unemployment claims had risen more than expected, from 9,000 to 225,000. While a meaningful deceleration in the labor market could suggest the Federal Reserve’s aggressive efforts to reduce inflation have worked, strategists at Citi considered that the weekly levels are still within late 2019 ranges, conveying the reduction is not yet here.
Before the market opened, Bespoke Investment Group, a research group, mentioned that the tech-heavy Nasdaq had reduced by 10.9% in the month. It said that if the decline for the Nasdaq continues, this will be the worst December since 1971. However, it added that Tax-loss selling, and no purchasers in sight, are likely to play a part in this recent weakness and that pressure would end if the calendar turns.
The gains in the United States bolstered European benchmarks, which were affected by the thin trading volumes of the holiday period. The Stoxx 600 finished 0.6% higher. The commodities-heavy FTSE 100 retrieved morning losses to close up 0.2%. In commodities markets, Brent crude, the international oil benchmark, settled 1.2% lower to $82.26.
The 10-year US government bond yield fell 0.06 % points to 3.83 percent. Yields reduce when the prices increase.
Hong Kong’s Hang Seng index closed down by 0.8 %, while China’s blue-chip CSI 300 index fell by 0.4%, as the major cities across the country faced rising Covid cases. Thursday’s decline came after China’s National Health Commission said it would remove the quarantine requirements for inbound passengers from January 8th, even as the country goes through its worst Covid outbreak. The announcement was the latest relief of the government’s punishing zero-covid policies, which have hit economic growth. Many countries, including the US and Italy, have announced that they need negative Covid tests for passengers traveling from China by flight. Hong Kong even eased more pandemic restrictions on Wednesday, removing PCR tests on arrival to the Asian financial hub and limiting dining in restaurants.
- Published By Team Nation Press News