The CNN Money Fear and Greed index showed some improvement in the overall market sentiment, while the index moved to the “Neutral” zone on Thursday.
U.S. stocks settled mixed on Thursday, with the Dow Jones index gaining more than 250 points. Defense stocks surged Thursday, erasing the prior session’s losses, after President Donald Trump floated a sharp increase in U.S. military spending that caught Wall Street’s attention.
Small-cap contractors led the charge. Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) jumped 14%, while Red Cat Holdings, Inc. (NASDAQ:RCAT) gained 13%. Karman Holdings Inc. (NYSE:KRMN) rose 10%.
On the economic data front, U.S. initial jobless claims increased by 8,000 from the previous week to 208,000 in the week ending Jan. 3, compared to market expectations of 210,000. The U.S. trade deficit shrank to $29.4 billion in October, recording the smallest gap since June 2009, versus a revised $48.1 billion gap in September and compared to market estimates of a $58.1 billion gap.
Most sectors on the S&P 500 closed on a positive note, with energy, consumer staples and consumer discretionary stocks recording the biggest gains on Thursday. However, health care and information technology stocks bucked the overall market trend, closing the session lower.
The Dow Jones closed higher by around 270 points to 49,266.11 on Thursday. The S&P 500 rose 0.01% to 6,921.46, while the Nasdaq Composite declined 0.44% at 23,480.02 during Thursday’s session.
At a current reading of 46.0, the index moved to the “Neutral” zone on Thursday, versus a prior reading of 43.7.
What is CNN Business Fear & Greed Index?
The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.
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