Economic news

Nasdaq Set for Record Open as Jobs Recovery Gains Traction

* Weekly jobless claims fall, Q1 GDP unrevised at 6.4%

* Tesla shares set to boost Nasdaq, S&P 500

* Eli Lilly jumps on plans to seek approval for Alzheimer’s drug

* Futures up: Dow 0.49%, S&P 0.48%, Nasdaq 0.63% (Adds comment, details; updates prices)

June 24 (Reuters) - The Nasdaq was set to open at a record high on Thursday, boosted by shares of Tesla and other top-shelf technology firms as data showing fewer weekly jobless claims pointed to a steady recovery in the labor market.

Initial claims for state unemployment benefits fell 7,000 to 411,000 for the week ended June 19, the Labor Department said on Thursday, but were still higher than the 380,000 that economists had forecast.

A separate report from the Commerce Department on Thursday confirmed economic growth accelerated in the first quarter, thanks to the massive fiscal stimulus.

Tesla Inc rose 2.8% after Chief Executive Officer Elon Musk said he would list SpaceX’s space internet venture, Starlink, when its cash flow is reasonably predictable, adding that Tesla shareholders could get preference in investing.

Mega-cap tech names Google-owner Alphabet Inc, Nvidia Corp, Microsoft Corp, Netflix Inc and Facebook Inc also gained between 0.6% and 0.7%, setting the benchmark S&P 500 index close to its record high after open.

“That’s more of a reflection of people’s confidence of coming back into markets,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in New York.

“How long it’s going to last is the question. If you see a rise in interest rates then some of that confidence maybe shaken.”

So far this week, the value index, which includes economy-linked energy, financial and industrial stocks, and its tech-heavy growth counterpart are both up almost 1.8% following the Federal Reserve’s hawkish forecast from a week ago.

The S&P 500 growth index is up 3.9% so far in June and has gained 9.9% for the quarter, compared to the value index , which dropped 2.23% this month.

“People are going to see more and more that value has become more expensive and growth stocks, which were seen as overvalued, have become cheaper and an opportunity for longer focused investors,” Pavlik said.

Focus was also on Biden’s meet with a bipartisan group of U.S. senators on Thursday to discuss their proposed framework for an infrastructure bill as he looks to push a large-scale spending package through Congress despite Republican opposition.

At 8:41 a.m. ET, Dow e-minis were up 164 points, or 0.49%, S&P 500 e-minis were up 20.5 points, or 0.48%, and Nasdaq 100 e-minis were up 89.5 points, or 0.63%.

Big lenders Wells Fargo, Bank of America, Morgan Stanley, Goldman Sachs and JPMorgan Chase & Co added between 0.5% and 0.6%.

MGM Resorts International rose 2.7% after Deutsche Bank upgraded the casino operator’s stock to “buy” from “hold”.

Eli Lilly and Co jumped 8.0% after the drugmaker said it would apply for U.S. health regulator’s accelerated approval for its experimental Alzheimer’s drug this year.

In response, Biogen Inc, which received a controversial approval for its Alzheimer’s drug aducanumab earlier this month, dropped 7.5%.

Accenture Plc gained 4.1% after the IT consulting firm raised its full-year revenue forecast.

Reporting by Devik Jain and Medha Singh in Bengaluru; Editing by Maju Samuel

Source: Reuters


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