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Investing.com — U.S. stock markets opened higher on Thursday, extending Wednesday’s gains on growing hopes that China can avoid a messy deleveraging of its real estate sector, and that the Federal Reserve may yet put off tightening monetary policy beyond the end of the year.
By 9:40 AM ET (1340 GMT), the Dow Jones Industrial Average was up 416 points, or 1.2%, at 34,675 points. The S&P 500 was up 1.0% and the Nasdaq Composite was up 0.7%.
Fed Chair Jerome Powell had hinted at Wednesday’s press conference that the process of ‘tapering’ bond purchases would begin later this year, and be completed by the middle of 2022. However, this week’s jobless claims data, which followed a much weaker-than-expected labor market report for August, have encouraged those who believe that the Fed will keep its foot to the floor for a little longer.
Earlier, the U.S. notched 351,000 initial jobless claims last week, more than expected and a second straight weekly increase, suggesting that the Delta-variant Covid-19 surge seen during the summer is finally feeding through into lay-offs. Continuing claims also came in above expectations, while IHS Markit’s Purchasing Manager Index for the U.S. economy fell by more than expected. While Markit’s PMI isn’t as closely followed in the U.S. as the Institute of Supply Management’s it does point to a clear slowdown in September.
