S&P 500, Nasdaq rise as Apple nears $2 trillion in market cap

(Reuters) – The S&P 500 and Nasdaq rose on Thursday, with Apple inching toward $2 trillion in market capitalization, as data showed jobless claims fell below one million last week for the first time since the start of the pandemic in United States.

While the S&P 500 remained within striking distance of a record high, the blue-chip Dow was weighed down by a 11.4% slump in Cisco Systems Inc (CSCO.O) after the company forecast first-quarter revenue and profit below estimates.

Apple Inc (AAPL.O) rose 2.2% as a report said the iPhone maker was readying a series of subscription bundles for its digital services. At its current share price of about $457, the company is about $10 a share shy of hitting $2 trillion in market capitalization.

Initial claims for state unemployment benefits decreased to 963,000 for the week ended Aug. 8, the lowest level since mid-March but the expiration of a $600 weekly jobless supplement at the end of July likely contributed to the decline.

Data last week showed the economy has regained only 9.3 million jobs of the 22 million jobs lost between February and April, indicating that it faces a long road to reach pre-pandemic levels.

But Wall Street has recovered most of the trillions lost during the start of the pandemic and the tech-heavy Nasdaq .IXIC was the first of the three major indexes to hit a record high in June. The Dow is about 5.6% below its February peak.

“Our take on a new high, if it happens, is that it’s another reminder to investors how disconnected the stock market and the economy have been this year. The stocks have soared but economy – it’s improved, yes – but a million initial claims is still not good,” said Ryan Detrick, senior market strategist at LPL Financial in Charlotte, North Carolina.

Meanwhile, markets continued to hold on to hopes the Democrats and the White House would reach an agreement for a stimulus to help the economy recover. Unemployment benefits have been a sticking point in their talks.

“There’s definitely a stalemate there and it just seems like the market has decided to take an optimistic view around the stimulus talks that’s right in line with how markets are looking at every outcome – the economic recovery, earnings recovery, vaccines,” said Dan Eye, head of asset allocation and equity at Fort Pitt Capital Group in Harrisburg, Pennsylvania.

The U.S. Presidential election is also expected to add another layer of uncertainty into markets, with roughly 12 weeks remaining until Election Day.

At 11:09 a.m. ET, the Dow Jones Industrial Average .DJI was down 46.98 points, or 0.17%, at 27,929.86, the S&P 500 .SPX was up 4.48 points, or 0.13%, at 3,384.83. The Nasdaq Composite .IXIC was up 104.57 points, or 0.95%, at 11,116.81.

Consumer discretionary .SPLRCD, technology .SPLRCT and communication services .SPLRCL were the few gainers among major S&P sectors.

AMC Entertainment Holdings Inc (AMC.N) jumped 14.4% after the firm said it will start its first phase of reopening theaters in the United States from Aug. 20, covering more than 100 venues.

Tapestry Inc (TPR.N) fell 2.8% even as it beat quarterly sales estimates.

Declining issues outnumbered advancers for a 1.10-to-1 ratio on the NYSE and for a 1.03-to-1 ratio on the Nasdaq.

The S&P index recorded seven new 52-week highs and no new low, while the Nasdaq recorded 38 new highs and 14 new lows.

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