Third Day of Gains Despite Rising Jobless Claims

Even a disappointing jobless claims print couldn’t keep stocks from a third straight day of gains on Thursday, leaving the major indices in a great position for weekly advances despite Monday’s sharp pullback. In fact, the NASDAQ goes into Friday’s session up by nearly 1.8% over the four days!

The index advanced 0.36% (or about 52 points) to 14,684.60, as tech outperformed once again. Several heavy hitters moved forward in the session, especially Microsoft (NASDAQ:MSFT, +1.7%), Amazon (NASDAQ:AMZN, +1.5%), Facebook (NASDAQ:FB, +1.4%) and Apple (NASDAQ:AAPL, +1%). Interestingly, the only FAANG in the red today was Netflix (NASDAQ:NFLX), which reported mixed results this past Tuesday.

Meanwhile, the S&P rose 0.20% to 4367.48, while the Dow advanced 0.07% (or about 25 points) to 34,823.35. These indices are up 0.9% and 0.4%, respectively, over the past four days, which is really impressive since Monday was one of the market’s worst days of the year.

This week’s jobless claims number was a real surprise… and not in a good way. The result came to 419,000, which breaks three straight weeks under 400K. It was also more than expected and higher than the previous week.

And yet stocks still grinded higher, perhaps because we’ve had a solid start to earnings season thus far. Intel (NASDAQ:INTC), Abbot Labs (ABT), Danaher (NYSE:DHR), AT&T (T) and Union Pacific (NYSE:UNP) all easily surpassed Zacks Consensus Estimates for earnings released today.

One of the most noteworthy reports on Thursday was Snap (NYSE:SNAP), which beat earnings estimates by an astounding 600% while revenues of $982.11 million eclipsed the Zacks Consensus Estimate by over 17%. Shares increased more than 16% afterhours, as of this writing.

Twitter (TWTR) also had a nice post-earnings advance of nearly 5% afterhours following better-than-expected results, along with a raised revenue guidance for Q3.

Tomorrow’s earnings schedule is a bit lighter than the rest of this week, though we’ll still see a number of reports including Honeywell (NASDAQ:HON) and American Express (NYSE:AXP). The big stuff comes next week though, as the rest of the FAANGs go to the plate along with Microsoft, Tesla (NASDAQ:TSLA) and hundreds of others.

Today's Portfolio Highlights:

Surprise Trader: Shares of Schneider National (NYSE:SNDR) have pulled back a bit, but earnings estimates continue to move higher. In fact, this leading transportation and logistics services company is now a Zacks Rank #2 (Buy). Dave thinks the stock is due to rise, so he added SNDR on Thursday with a 12.5% allocation before its next earnings report. The company has beaten the Zacks Consensus Estimate for five straight quarters and has a positive Earnings ESP for the next report on Thursday, July 29 before the bell. It beat by 6.9% last time. Along with the addition, the editor decided to sell Alcoa (NYSE:AA) for a 5.3% return in two weeks. Read the full write-up for more.

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Income Investor: "After trading in the red for much of the day due to weaker-than-expected jobs data, the major indexes bounced back thanks to a nice showing from tech stocks; some of the biggest players, like Amazon and Facebook, are reporting earnings next week.

"Jobless claims unexpectedly climbed to 419,000 last week, higher than the 350,000 estimate economists were anticipating. But, continuing claims declined by 29,000 to 3.24 million, which is a new pandemic low.

"Just as we should expect choppier trading to continue throughout the summer, weekly jobs data likely won’t be a smooth ride either.

"This doesn’t mean the recovery has stalled or the labor market isn’t poised for gains down the road. Rather, the economy decided to take the scenic route as it bounces back from the pandemic." -- Maddy Johnson

Have a Good Evening,
Jim Giaquinto

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