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Initial weekly jobless claims rise more than expected
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SVB Financial slumps on 2023 forecast cut
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Futures mixed: Dow up 0.10%, S&P up 0.01%, Nasdaq down 0.09%
(Updates prices, adds data and comments)
By Amruta Khandekar and Shristi Achar A
March 9 (Reuters) - U.S. stock indexes were set to open
subdued on Thursday after a sharp rise in weekly jobless claims
eased some rate-hike concerns ahead of a key jobs report that
could determine the Fed's policy path.
Initial claims for state unemployment benefits rose 21,000
to a seasonally adjusted 211,000 for the week ended March 4, the
Labor Department said on Thursday. Economists polled by Reuters
had forecast 195,000 claims for the latest week.
Traders reduced bets of a 50-basis-point rate hike at the
Fed's next meeting after the data, with the terminal rate now
seen at 5.63% in September compared with 5.67% prior to the
report. .
"This could be a game changer for today's market," said
Peter Cardillo, chief market economist at Spartan Capital
Securities in New York.
"It's certainly good news in terms of higher interest rate
expectations. If this trend continues, the Fed might not have to
be that aggressive."
The jobless claims report comes on the heels of a string of
recent data that has indicated a tight labor market which, along
with hawkish remarks by Federal Reserve Chair Jerome Powell, had
exacerbated concerns that the central bank could shift to more
aggressive rate hikes.
Powell, on the second day of his testimony on Wednesday,
reaffirmed his message of likely sharper interest rate hikes,
but emphasized that the decision hinged on economic data before
the central bank's March meeting.
Powell's testimony has led markets, which until recently had
been expecting a 25-basis-point rate hike, to dramatically
increase their bets for a larger 50 bps increase by the Fed in
March.
Investors' focus is now on the all-important February non-farm payrolls report due on Friday. The reading is expected to show payrolls increased by 205,000 last month, according to economists polled by Reuters, after January's blowout 517,000 figure, which had first led markets to reprice their expectations for U.S. interest rates. At 8:45 a.m. ET, Dow e-minis were up 33 points, or 0.1%, S&P 500 e-minis were up 0.25 points, or 0.01%, and Nasdaq 100 e-minis were down 11.25 points, or 0.09%. Weighing on Nasdaq futures, shares of Tesla Inc fell 1.1% in premarket trade and were set to extend losses from the previous session on news of a probe by the U.S. auto safety regulator.
Silvergate Capital Corp plunged 37.7% after the crypto-focused bank said late on Wednesday it was planning to wind down operations and liquidate voluntarily.
Shares of SVB Financial Group slumped 28.9% as the startup-focused lender slashed its 2023 outlook and announced a $1.75 billion share sale to shore up its balance sheet.
Peloton Interactive Inc fell 1.0% after the U.S. International Trade Commission (ITC) banned imports of video-streaming fitness devices made by the fitness equipment maker.
General Electric Co rose 2.8% as the industrial
conglomerate reiterated its 2023 earnings forecast.
(Reporting by Amruta Khandekar, Shristi Achar A and Johann M
Cherian in Bengaluru, additional reporting by Medha Singh
Editing by Vinay Dwivedi)
