Stock Market Today: Stocks Rise as Jobless Claims Jump, Big Tech Bounces

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published 8 June 2023

A slow start for stocks Thursday turned into a firm finish after the latest jobs data lowered expectations for another rate hike at next week's Fed meeting.

A bounce in several Big Tech stocks created tailwinds for the broader market, too, with all three benchmarks ending the day with solid gains.

Ahead of the opening bell, data from the Labor Department showed that initial jobless claims jumped 28,000 last week to 261,000. "The report on jobless claims released this morning came in much higher than Wall Street's estimates and was the highest weekly rate since October 2021," says Anthony Denier, CEO of Webull, a commission-free trading platform. "Typically, this should be a sign the economy is slowing down, which is bad for stocks, but it appears to have not had much of an effect on the markets."

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Indeed, the tech-heavy Nasdaq Composite rose 1.0% to 13,238, the broader S&P 500 added 0.6% to 4,293, and the blue chip Dow Jones Industrial Average closed up 0.5% at 33,833.

Also fueling tailwinds for the broader market were several large-cap tech and communication services stocks, which jumped as Treasury yields retreated after Wednesday's big spike. Among the notable gainers were Apple (AAPL, +1.6%), Amazon.com (AMZN, +2.5%) and Netflix (NFLX, +2.4%).

GameStop stock spirals after earnings

On the flip side, original meme stock GameStop (GME) plunged 17.9% after the video game retailer reported earnings. GME said its first quarter net loss narrowed to $50.5 million from $157.9 million, even as net sales declined 10% year-over-year to $1.2 billion. The company also said that it fired CEO Matthew Furlong, with newly elected executive director Ryan Cohen "overseeing management" for now, according to the press release.

"We remain convinced that GameStop is doomed, with declining physical software sales and a shift of sales to subscription services and digital downloads sealing its fate," says Wedbush analyst Michael Pachter (Underperform, the equivalent of Sell). What's more, the analyst believes the "lack of clear direction and the callous termination of Mr. Furlong all but ensures that Mr. Cohen will have difficulty attracting a qualified replacement."

No bull market yet

Today's broad market gains will likely spark more headlines that the S&P 500 has entered a new bull market. Although the index is about 20% above its closing low from October 2022, "it takes more than a 20% gain off the low to proclaim the beginning of a new bull market," says Dan Burrows, senior investing writer at Kiplinger.com. As Burrows explains in his column "We Are Not in a Bull Market," a new bull market is not confirmed until the index surpasses its previous closing high.

With that in mind, investors seeking out the best stocks to buy would do well to continue to focus on high-quality companies. These can include those found among the best dividend stocks, the best blue chip stocks or the best Dow stocks – many of which tend to have sound fundamentals and are often steady long-term performers, regardless of what type of market we're in.

With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at Schaeffer's Investment Research. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.