Market Snapshot: S&P 500 books 6th record close in a row, its longest such streak since Aug. 2020

What drove the market?

The S&P 500 swept to a sixth straight record close on Thursday, led by cyclical stocks including energy, financials and industrials, but with growth stocks ending the session lower.

The economy has been recovering from the COVID pandemic, but there still are questions about the health of the jobs market and inflation that could derail the bullish sentiment supporting all three main stock indexes.

Thursday’s action marked a fresh run toward, or above, prior records for the three main indexes, after posting their best first-half performances since 2019.

But the big item, in terms of gauging the pace of the economic recovery, comes on Friday with monthly payroll figures from the Labor Department. The Federal Reserve lately has stressed the need to reclaim lost jobs as a key to healing the economy.

“The big question mark is going to be the participation rate and, even more so, what the hourly wage costs are,” said Peter Cardillo, chief market economist at Spartan Capital, in an interview with MarketWatch.

“I don’t see the participation rate moving very much, with it likely being still stuck near levels of the past few months. But we could see an increase in hourly wages, which could be a negative point for the bond market.”

See: The U.S. might have added 700,000 new jobs in June, but millions are still out of work

In economic data Thursday, first-time jobless claims fell to 364,000 last week from 411,000 the previous week, the Labor Department said. Economists had forecast a decline to 380,000. The data comes follows a better-than-expected update on private-sector employment from ADP on Wednesday.

“Not only did we print the lowest number since the pandemic began, but it also reverses the trend on misses that we’ve seen the past few weeks,” said Cliff Hodge, chief investment officer for Cornerstone Wealth, about the weekly dip in jobless claims. “Staying below that big-round-number [400,000] level could bolster confidence in risk taking during the dog days of summer,” he said. 

Meanwhile, the IHS Markit final reading of its US. June manufacturing PMI was 62.1 compared with a flash estimate of 62.6, but unchanged from the May final reading. The Institute for Supply Management’s more closely followed manufacturing index slipped to 60.6% in June from 61.2% in May, coming in slightly below the Wall Street forecast. A reading of more than 50 indicates an expansion in activity.

“Make no mistake, this is an incredibly strong report where anything above 50 is in expansion territory,” said James Knightley, chief international economist at ING, in a note.

Construction spending fell 0.3% in May at a seasonally adjusted annual rate of $1.55 trillion though, the U.S. Commerce Department reported. Economists polled by Wall Street Journal had expected a 0.5% increase.

Crude oil prices settled higher Thursday, even as the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, postponed a decision until Friday about further easing of output cuts. They were expected to agree to lift output by around 500,000 barrels a day beginning in August. This rise is expected to be easily absorbed by the market as the global economy gains momentum. Chevron CVX, +1.40% stock gained 1.4%, making the stock one of the best performers in the Dow.

See: Oil could top $100 as commodities boom shifts away from China, says top economist

In other data Thursday, the U.S. budget deficit will hit $3 trillion for the fiscal year 2021, according to an estimate from the nonpartisan Congressional Budget Office. The gap would be 13.4% of GDP, the CBO said, the second-largest since 1945, reflecting the fiscal stimulus provided by Congress to support the economy’s recovery from the pandemic.

In public health news, the World Health Organization said a 10-week decline in new COVID cases in Europe has come to an end, with cases up 10% last week. WHO regional director for Europe Hans Kluge said the rise is due to relaxed restrictions and increased travel, the Guardian reported, and said a new wave will emerge if discipline isn’t maintained. 

Which companies were in focus?

• Robinhood Markets, the trading app that saw its popularity surge during the pandemic, filed documents for an initial public offering on Thursday with plans to list on Nasdaq under the ticker symbol “HOOD.” The filing shows the company has 17.7 million monthly active users and $81 billion in assets under custody
• McCormick & Co. shares MKC fell 0.4%, after the maker of spices and flavorings beat estimates for its fiscal second-quarter and raised guidance.
• MKS Instruments Inc. MKSI said Thursday it has reached an agreement to acquire Atotech Ltd. ATC, in a cash-and-stock deal with an equity value of $5.1 billion and an enterprise value of about $6.5 billion. MKS shares fell 4%, while Atotech stock dipped 1.7%.
• Elliott Management has called on British pharmaceutical giant GlaxoSmithKline GSK, +0.88% to name new directors to its board and begin a process that will determine the future of its embattled CEO, Emma Walmsley.
• Krispy Kreme Inc. DNUT, +23.53% priced its initial public offering at $17 a share late Wednesday, significantly below the expected range of $21 to $24 a share. Shares made their debut Thursday on Nasdaq. Shares rose 20.5%.
• Shares of Chinese electric car company NIO Inc. NIO, -4.32%  fell 4.3%, after the company said it delivered 8,083 vehicles in June, up 116.1% from the same time a year ago.
• General Motors Co. GM, -0.10% shares rose 1.4% after the auto maker said it sold 688,236 vehicles in the U.S. in the second quarter, up 40% from pandemic-reduced levels a year ago.

How did other markets do?

• The yield on the 10-year Treasury note TMUBMUSD10Y, 1.457% rose 3.6 basis points to 1.479%. Yields and debt prices move in opposite directions.
• The ICE U.S. Dollar Index DXY, +0.13%, a measure of the currency against at basket of six major rivals, was up 0.1%.
• The U.S. oil benchmark CL00, +2.04% closed up 2.4% ending at $75.23 a barrel after a decision was delayed by OPEC+ on whether to further boost production beginning next month. Gold futures GCQ21, +0.32% rose $5.20, or 0.3%, to settle at $1,776.80 an ounce.
• In European equities, the Stoxx 600 Europe SXXP, +0.62% rose 0.6% and London’s FTSE 100 UKX, +1.25% advanced 1.3%.
• In Asia, the Shanghai Composite SHCOMP, -0.07% fell 0.1%, while Japan’s Nikkei 225 NIK, -0.29% was off 0.3%.

Mark DeCambre contributed reporting