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Midday Market Update

U.S. Stocks Higher Amid Low Jobless Claims

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U.S. Markets
Jobless claims fell by 10,000 to a seasonally adjusted 258,000 in early December. These claims are a proxy for layoffs across the United States and are used to gauge the strength of the job market. Fewer people filing for unemployment benefits means more have jobs. Jobs give households spending power, which helps the economy grow. However, the low level of unemployment claims might make it tough for businesses to find new workers. They might have to pay overtime wages to current employees or pay higher wages to attract people from other jobs. Having to spend more on labor costs leads to wage inflation, which isn't good for bond and stock markets. This was the 92nd-straight week that claims were below 300,000, a threshold associated with a robust labor market. This was the last significant reading on jobs before the Federal Reserve's interest-rate decision on Wednesday.  

The Nasdaq was up 0.26% and hit an all-time intraday trading high of 5407.02. The Dow was down 0.05%. The S&P 500 was down 0.03% after opening the day in the green. Eight of the S&P 500's 11 sectors were trading in negative territory. The utilities and real estate sectors were the worst performers as news came in that rates for home loans increased for the sixth consecutive week.

Manjul Bhusal Sharma does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.