Stock Market Today (9/2/21): Jobless Claims Drop, Energy Stocks Pop

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The major indexes made a tidy little jump out of the gate Thursday in response to fresh, encouraging data on the employment front a day after a weak August ADP payrolls reading ruffled some feathers.

The Labor Department reported that jobless-benefits claims for the week ended Aug. 28 dipped to 340,000 the lowest tally since March 2020, and 5,000 claims fewer than what economists expected brighter news than yesterday's weak payroll report from payroll firm ADP.

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U.S. crude oil futures rose 2.0% in response, to $69.99 per barrel, helping ConocoPhillips (COP, +3.6%), Exxon Mobil (XOM, +2.4%) and others benefited most from this early pop.

Stocks, however, broadly finished below their intraday highs. The S&P 500 (+0.3% to 4,536) and NasdaqComposite (+0.1% to 15,331) both managed to scratch out fresh highs. The Dow Jones Industrial Average closed 0.4% higher to 35,443, and the small-cap Russell 2000 (+0.7% to 2,304)! recorded its third consecutive improvement.

From here, attention shifts to tomorrow morning's August jobs report. “It feels like the market is set up for a 'Goldilocks' number after yesterday's ADP miss. ADP has not been a good indicator for the official data over the past year,” says Michael Reinking, senior market strategist for the New York Stock Exchange. “Given the positioning, it feels like there is a little more risk if the number were to surprise to the upside. If nonfarm payrolls are above the estimate (~750k), this could very well push the Fed to move in September. Anything below 500k would provide some additional cover.”

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Steve Sosnick, chief strategist at Interactive Brokers, provides additional insight into why the ADP report might not be indicative of what's to come tomorrow.

“It would be logical to think ADP payrolls offer an excellent guide to the nonfarm payrollnumbers that follow.Unfortunately, the data shows otherwise,” he says, noting that the correlation “stinks” over the past 20 years. “I believe that most of the differences stem from the different types of data that are collected.ADP data is collected from their customers, who skew larger, while (Bureau of Labor Statistics) data specifically attempts to reach smaller businesses.”

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Other news in the stock market today:

Online pet-goods retailer Chewy (CHWY, -9.3%) sank after announcing quarterly sales of $2.16 billion up a robust 27% year-over-year but just shy of analysts' estimates. The company's net loss of 4 cents per share also came in deeper than expected (-2 cents), and Q3 sales guidance of $2.20 billion to $2.22 billion also disappointed the pros ($2.23 billion).After plunging nearly 17% on Tuesday in the wake of a disa! ppointing! earnings report,Zoom Video Communications(ZM) shares have stabilized, adding 1.5% today. Zoom's latest quarterly results and subsequent stumble don't have Wall Street pros throwing in the towel, though. The majority maintain a Buy recommendation on ZM, and ARK Invest CEO Cathie Wood took the opportunity to buy the dip. You canread more about ZM stock's recent movements here.Analysts are stayingbullish onFive Below(FIVE), too, even as shares spiraled 13.0% following the discount retailer's turn in the earnings confessional. For its second quarter, FIVE reported better-than-expected earnings of $1.15 per share, but revenue of $646.6 million fell short of the consensus estimate. BofA Global Research analysts reiterated their Buy rating on the stock. FIVE's “diverse assortment and strong value proposition resonates with consumers seeking value and we see a long runway for growth,” they wrote in a note. Meanwhile, Jefferies analysts say to “buy the dip” as “new store growth remains high … and cash flow generation is strong.”Gold futuresshed 2.5% to settle at $1,811.50 an ounce.The CBOE Volatility Index (VIX)advanced 1.4% to 16.34.Bitcoinenjoyed another up-day, climbing 2.3% to$49,329.97. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)stock chart for 090221.imgHideOnJavaScriptDisabled_4059a2rkt6jqaeg { display: none !important; } stock chart for 090221

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