Jobs Boost Helps Wall Street Edge Upwards

US stocks advanced slightly on Thursday, as data showing improvement in the labour market helped bolster expectations in the economic recovery and spurred a minor rotation towards stocks seen as more likely to benefit from the rebound.

The number of Americans filing new unemployment claims dropped more than expected last week to a 14-month low of 406,000 as pandemic restrictions continue to be lifted, while a separate report showed business spending on equipment picked up speed.

The data helped lift US Treasury yields, with the benchmark 10-year note reaching a high of 1.625 percent and denting the attractiveness of higher-growth names in areas such as technology while helping those seen as more likely to benefit from an improving economy such as financials and small caps.

Still, the 10-year yield remained within the range it has been in for several days, which served to keep inflation concerns in check and limited the rotation within sectors.

Investors have been closely watching economic data and comments from Federal Reserve officials for signs of runaway inflation and the possibility the central bank may begin to pull back on its massive stimulus measures.

"When you look at the jobless claims that actually shows we're continuing to make progress, if we get a strong jobs report in the next release that's going to provide some support, until then there's uncertainty so I don't think there's a lot of momentum either way," said Brad McMillan, chief investment officer for Commonwealth Financial Network, in Waltham, Massachusetts.

"We've had the Fed come out and say we're going to continue to support things but now we're starting to be a little bit nervous, that's obviously a headwind."

The Dow Jones Industrial Average rose 0.41 percent, to 34,465, the S&P 500 gained 0.12 percent, to 4,201 and the Nasdaq Composite dropped 0.01 percent, to 13,736.

Weighed down by weakness in tech shares, the Nasdaq underperformed the Dow and S&P.

Investors will now look to the personal consumption expenditure report due on Friday as it is the central bank's preferred inflation measure for its 2 percent long-term target. (Reuters)