Dow ends higher to make it seven in a row, as jobs data boosts rate-cut hopes

* Weekly jobless claims rise more than expected

* Roblox slumps after bookings forecast cut

* Focus on next week’s inflation readings

May 9 (Reuters) – The Dow Jones Industrial Average ended
up on Thursday, the seventh straight daily advance for the
benchmark, as all three major U.S. indexes gained after weekly
jobless claims data offered fresh hope for interest-rate cuts.

U.S. Federal Reserve policy has been the main driver of
investor sentiment in 2024. Renewed hopes the central bank will
cut rates have pushed the Dow to its biggest rally since
December.

Other benchmarks also benefited. After a flat day on
Wednesday, the S&P 500 resumed its upward trajectory and
closed above 5,200 points for the first time since April 9.

U.S. equity markets have clawed back losses incurred
during April on fears the Fed may ultimately raise interest
rates, and as tensions in the Middle East threatened to
escalate.

“We’ve almost had a full recovery of that,” said Brad
Bernstein, managing director at UBS Private Wealth Management.

While next week’s producer and consumer prices readings are
regarded as the next key signpost, other data have buoyed
investor rate-cut hopes.

The number of Americans filing new claims for unemployment
benefits increased more than expected to a seasonally adjusted
231,000 last week, data showed. Economists polled by Reuters had
forecast 215,000 claims.

Last week’s data showing slowing job growth in April and job
openings falling to a three-year low in March had investors
pricing in one or two rate cuts by the Fed this year. Prior to
that, traders were pricing in just one rate cut.

Declining U.S. Treasury yields also supported stocks since
higher rates offer investors less risk while also making
borrowing to fuel growth more expensive. The yield on the
10-year note was at 4.46% on Thursday, down from 4.7% two weeks
ago.

“In the last few days, we’ve had some interesting events
which have really helped calm the bond market,” said Bernstein,
noting factors including the U.S. Treasury and Fed announcing
plans to buy Treasuries.

Lower yields are particularly supportive for tech
megacap stocks, Apple, Amazon.com and Meta
Platforms META.O> were all higher.

According to preliminary data, the S&P 500
gained 26.90 points, or 0.52%, to end at 5,214.57 points,
while the Nasdaq Composite gained 44.96 points, or
0.28%, to 16,347.72. The Dow Jones Industrial Average
rose 339.68 points, or 0.87%, to 39,396.07.

A majority of the 11 major S&P sectors rose, led by a rise
in the real estate index. Data center operator Equinix
surged after its first-quarter results.

On the flip side, chip designer Arm Holdings dipped
as its full-year revenue forecast came in below expectations.
Bigger rival Nvidia, which is still to report this
earnings season, slipped.

Roblox slumped after the video-gaming platform cut
its annual bookings forecast, in a sign that people were dialing
back spending amid an uncertain economic outlook and elevated
levels of inflation.

Robinhood Markets was lower, despite the online
brokerage beating estimates for first-quarter profit, thanks to
robust crypto trading volumes and rate hikes that boosted its
net interest revenue.

Meanwhile, Spirit Airlines jumped, having hit a
record low earlier this week.
(Reporting by Sruthi Shankar and Shristi Achar A in Bengaluru
and David French in New York; Editing by Devika Syamnath,
Shinjini Ganguli, Sweta Singh and David Gregorio)