S&P 500 Hovers as Industrials Jump; Reddit Short-Squeeze Returns

© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 was modestly higher Thursday, following a General-Electric-led rally in industrials stocks and signs of an improving labor market.

The rose 0.23%, the was down 0.14%, or 47 points, and the slipped 0.54%.

Industrials were up more than 1%, led by gains in Boeing (NYSE:) and General Electric (NYSE:) as the recovery in the aviation sector continued to take shape.  Aircraft maker Airbus unveiled a plan to ramp up production of its A320 models per month to 64 by the second quarter of 2023.

Sentiment on the broader cyclicals sector including materials continues to be supported by data signaling an ongoing improvement in the labor market as jobless claims fell to a new pandemic low.

fell 38,000 to 406,0000 in the week ending May 22, the lowest level since March 2020. That topped economists estimates for a decline to 425,000.  

“There was a big downward shift in claims in the beginning of April that came as a result of more progression in the reopening process. Since that big drop during the week of April 10, claims have been grinding lower, week by week,” Jefferies (NYSE:) said in a note.

Financial were also in the ascendency, with regional banks racking up gains following a renewed ride higher in rates as the jumped above 1.6%.

Invesco (NYSE:), Huntington Bancshares (NASDAQ:), Citizens Financial (NYSE:) were among the biggest sector gainers.

In tech, meanwhile, chip stocks gave up some gains following weakness in Nvidia (NASDAQ:).

Nvidia’s first-quarter results topped expectations, and the chipmaker raised guidance on revenue, but doubts about how much growth was led by hardware demand from cryptocurrency miners flagged concerns about sustainability.

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Elsewhere on the earnings front,  Snowflake Inc (NYSE:) fell 2% despite reporting better-than-expected quarterly results.

Best Buy Co Inc (NYSE:), meanwhile, rose 2% after lifting its outlook on full-year comparable sales and reporting quarterly results that beat on both the top and bottom lines.

Energy, struggled to advance weighed down by a slip in the oil majors including Chevron (NYSE:) and Exxon Mobil (NYSE:) after losing at least two board seats to activist investor Engine No .1 over its climate strategy.

“While the majority of the board will still be XOM-chosen, this historic defeat is a clear signal that shareholders want to see XOM do more to address climate … which could spark change at the company,” Credit Suisse (SIX:) said.

In a throwback to Reddit meme trade seen earlier this year January, the short-squeeze on Reddit favorite AMC Entertainment (NYSE:) returned as the stock jumped 59%. That big bets on AMC and other reddit names including Beyond Meat (NASDAQ:) and GameStop (NYSE:) is here to stay as given “zero commissions, more time at home, and high savings rates,” Bank of America (NYSE:) said in a note. There could, however, be decline in activity in the back end of the year as stimulus dries up and the economy fully re-opens. 

In other news, General Motors (NYSE:) jumped 5% following a Reuters report that the company is resuming production at five of its plants that were previously shutdown due to the chip shortage.



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