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Investing.com — U.S. stock markets edged higher at the open on Thursday amid fresh indications that the labor market recovery has lost momentum this month.
Initial jobless claims rose for the third straight week to 362,000, defying expectations for a decline to 335,000. That’s the first time since early in the pandemic they have risen for three weeks in a row, although the increases remain much smaller than they were last year. The news overshadowed a minute upward revision to annualized GDP growth in the second quarter, data that is now firmly in the rear view mirror.
By 9:35 AM ET (1335 GMT), the Dow Jones Industrial Average was up 126 points or 0.4% at 34,516. The S&P 500 was also up 0.4% and the NASDAQ Composite was up 0.6%.
Claims have risen steadily as Delta-variant Covid-19 has continued to disrupt both supply chains overseas and economic and social life closer to home. On top of that, consumer sentiment and spending power have weakened as the emergency uplift to unemployment benefits was withdrawn in many states.
“The end of emergency unemployment benefits may have done more bad than good amidst a Delta- and supply-induced economic slowdown in Q3,” said Greg Daco, chief U.S. economist with Oxford Economics, via Twitter (NYSE:TWTR).
Despite inching higher, the S&P is on track for its biggest monthly decline since March 2020, unsettled by signs of higher inflation and consequently tighter monetary policy, along with peaking earnings growth and business disruptions set to last well into next year.
Bed Bath & Beyond Inc (NASDAQ:BBBY) stock became the latest to be hit by such issues, falling 25% after the retailer reported sales and earnings well short of expectations after a quarter hit by a drop in footfall and supply chain problems that it said will likely carry on for some time. The news casts doubt over management’s ability to turn around the retailer, which was supported last by retail investors who squeezed institutional short sellers hard.
BBBY’s troubles also infected Kohls (NYSE:KSS) stock, which was already under pressure after a two-notch downgrade from Bank of America (NYSE:BAC). Kohls stock fell 12.1%. Nordstrom (NYSE:JWN) stock and Macy’s (NYSE:M) stock also fell 6% in sympathy.
Elsewhere, heavyweight tech stocks recovered somewhat after heavy losses earlier in the week, while Virgin Galactic (NYSE:SPCE) stock rose 11% after the Federal Aviation Administration cleared the company to carry on with its flight program after closing an inquiry into pilot conduct during its first crewed flight.
