Stocks opened sharply higher on Thursday as the Street attempted to reclaim some of September’s losses.
As of 1520 BST, the Dow Jones Industrial Average was up 1.37% at 34,728.75, while the S&P 500 was 1.20% firmer at 4,448.47 and the Nasdaq Composite started out the session 0.98% firmer at 15,042.18.
The Dow opened 470.43 points higher on Thursday, extending gains recorded in the previous session after the Federal Reserve indicated it was anticipating several interest rate hikes in the next three years in its latest policy decision.
The Federal Open Market Committee’s decision to stand pat on current near-zero interest rate targets was still in focus at the open. The Fed said overnight that it could raise interest rates between six and seven times between now and the end of 2024, and added that it had progressed discussions on reducing its asset purchase programme.
Hong Kong-listed real estate giant Evergrande was also in focus, with investors still unsure if the company, which resolved payment on a local bond, will be able to pay $83.0m in interest on a US dollar-denominated bond due today. According to the Wall Street Journal, Beijing has warned local authorities to brace for a “possible storm” if Evergrande goes bust.
On the macro front, initial claims came to 351,000 last week, according to the Labor Department, up from the previous week’s upwardly revised total of 335,000 and significantly ahead of estimates for a reading of 320,000. Continuing claims also grew, jumping by 181,000 to over 2.84m. On the other hand, the four-week moving average for initial claims dropped to 335,750, a decrease of 750 week-on-week, while the four-week moving average for continuing claims fell by 15,750 to just over 2.8m.
Elsewhere, the Chicago Fed’s August national activity index declined to 0.29 in August from 0.75 in July, while the Conference Board’s leading index increased by 0.9% to 117.1, following a 0.8% increase in July.
Lastly, a flash reading of IHS Markit’s September manufacturing PMI revealed that the manufacturing sector continued to expand in September, but at a slower pace than in August, as the PMI declined to 60.5 from 61.1, slightly weaker than market expectations for a print of 62.5.
In the corporate space, Accenture said first-quarter revenues were expected to beat analyst expectations amid stronger demand for its cloud and security services, while Salesforce also traded higher after raising full-year revenue guidance.
Still to come, Costco and Nike will both report earnings after the close.