US stocks bounce higher as jobs data reassures

US stocks snapped higher on Thursday as unemployment data eased recession concerns, while European and Asian equities struggled.

First-time claims for unemployment benefits dropped last week by more than expected to 233,000, according to Labor Department data.

“The key takeaway from the report is that the downturn in initial jobless claims — a leading indicator — is helping to quell recession concerns,” said Briefing.com analyst Patrick O’Hare.

Data last Friday showing fewer than expected US jobs created in July triggered concern that the Federal Reserve had waited too long to begin cutting interest rates and that the US economy could end up sliding into recession.

“Any data which suggests that the Fed isn’t behind the curve in regards to its likely rate-cut in September is welcomed news for investors,” said eToro US investment analyst Bret Kenwell.

US recession fears, combined with a spike in the value of the yen following a Japanese rate hike last week, sent global equity markets plunging Monday.

Since then there have been rebounds and renewed losses as traders seek to weigh up the risks of recession in the United States, the world’s biggest economy.

In Europe, London and Paris closed lower Thursday but Frankfurt pushed higher, after Tokyo closed down 0.7 percent.

The Japanese index had tumbled more than 12 percent Monday before rocketing over 10 percent Tuesday, largely because of wild swings in the yen against the dollar.

Investors are also closely tracking corporate earnings.

Warner Bros. Discovery’s share price plunged around nine percent Thursday after it reported a quarterly loss of almost $10 billion.

Almost all of the loss was down to a $9.1 billion write-down in the value of the US media giant’s cable network, it announced in a statement, underscoring the challenges facing the legacy television industry.

Weak earnings from Disney, Airbnb and TripAdvisor added to the sense of concern that American consumers were tightening their belts as the impact of elevated inflation and two-decade-high borrowing costs bite.

Federal Reserve boss Jerome Powell last week indicated that the US central bank could cut interest rates at its September meeting, with 25 basis points seen as the likely move.

But traders are now eyeing as many as 50 points, with another 50 possibly before the end of the year, following last weeks jobs data.

The prospect of several reductions has been offset by profit-taking in the tech sector, where valuations have soared this year on a rush for all things related to artificial intelligence.

On volatile foreign exchange markets Thursday, the yen again fell against the dollar after tumbling Wednesday in reaction to a dovish signal from the Bank of Japan that its recent rate-hikes would not be repeated.

European natural gas prices hit their highest price of the year on Thursday after Ukrainian soldiers seized a Russian gas transit station on the last remaining pipeline shipping Russian natural gas to Europe, hitting 40.475 euros per megawatt hour.

European natural gas prices have risen around 9 percent since Tuesday.

– Key figures around 1530 GMT –

New York – Dow: UP 1.5 percent at 39,324.53 points

New York – S&P 500: UP 1.8 percent at 5,294.94

New York – Nasdaq Composite: UP 2.2 percent at 16,546.39

London – FTSE 100: DOWN 0.3 percent at 8,144.97 (close)

Paris – CAC 40: DOWN 0.3 percent at 7,247.45 (close)

Frankfurt – DAX: UP 0.4 percent at 17,680.40 (close)

Euro STOXX 50: FLAT at 4,668.74 (close)

Tokyo – Nikkei 225: DOWN 0.7 percent at 34,831.15 (close)

Hong Kong – Hang Seng Index: UP 0.1 percent at 16,891.83 (close)

Shanghai – Composite: FLAT at 2,869.90 (close)

Dollar/yen: UP at 147.24 yen from 146.83 yen on Wednesday

Euro/dollar: DOWN at $1.0910 from $1.0925

Pound/dollar: UP at $1.2724 from $1.2692

Euro/pound: DOWN at 85.73 pence from 86.06 pence

West Texas Intermediate: UP 1.2 percent at $76.15 per barrel

Brent North Sea Crude: UP 0.8 percent at $78.95 per barrel

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