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The surge of the Nasdaq Composite to its ATH was also supported by the impressive job data that was better than analysts’ projections.
The Nasdaq Composite rose to an All-Time High (ATH) on Thursday after the United States Federal Reserve announced its plans to taper its bond-buying program, an indication of a strong economy. The Nasdaq tech-heavy index (INDEXNASDAQ: .IXIC) soared 0.81% to 15,940.31 as an upsurge in tech stocks stirred the impressive rally.
The S&P 500 (INDEXSP: .INX) also rallied positively for the sixth day in a row and grew by 0.42% to 4,680.06. Going by the current growth, the S&P 500 is up 1.6% for the week and soared 24.6% for the month. The slump in banking stocks placed a wedge on the rally of the Dow Jones Industrial Average (INDEXDJX: .DJI) which dropped 33.35 points atop a 0.092% dip to 36,124.23.
While the slump in the shares of Goldman Sachs Group Inc (NYSE: GS), and JPMorgan Chase & Co (NYSE: JPM) impacted the 30 stock benchmark, investors are particularly impressed that the central bank is not going all aggressive in rolling back its stimulus cushion for the economy. This allowance gives businesses time to adjust to the new reality of standing alone without the Fed’s interference.
“The Fed’s tapering announcement removes a minor, but overhanging worry across markets, as investors had been waiting for this moment for months, and it reinforces the view that the economic recovery has a long runway, albeit with a low rate of growth,” said George Ball, chairman of Sanders Morris Harris. It “is a signal of economic strength, which is good for corporate earnings and markets.”
While semiconductors and software manufacturer, Qualcomm Inc (NASDAQ: QCOM) with a growth of 12.73% to $156.11 comes off as one of the biggest market movers, COVID-19 manufacturer Moderna Inc (NASDAQ: MRNA) slumped by 17.89% after the firm slashed its revenue expectations for vaccine sales.
Nasdaq Composite ATH Helped by Improving Jobless Claims
The surge of the Nasdaq Composite to its ATH was also helped by the impressive job data that was better than analysts’ projections. The jobless claims for the week ended October 30 were pegged at 269,000 as against the 275,000 projected by analysts’ expectations.
“This could stand as another proof point of solid gains when it comes to our economic recovery,” Mike Loewengart, managing director of investment strategy at E-Trade Financial. “But Chairman Powell noted he wants to see more robust jobs progress, so all eyes will be on the full employment picture tomorrow and how that will translate to the Fed’s actions going forward.”
The report detailing the number of added jobs for October is billed to be released, and a figure at or better than analysts’ projection of 450,000 jobs is bound to fuel a new rally in not just the Nasdaq Composite but in the other major indexes.