After ending the previous session sharply higher stocks are turning in a relatively lackluster performance during trading on Thursday. While the Nasdaq has seen further upside and reached a new record intraday high, the S&P 500 is giving back ground.
Currently, the major averages are turning in a mixed performance. The Nasdaq is up 39.40 points or 0.2 percent at 17,647.84, but the S&P 500 is down 6.52 points or 0.1 percent at 5,414.51 and the Dow is down 268.83 points or 0.7 percent at 38,443.38.
The choppy trading on Wall Street comes despite the release of U.S. economic data that seemed likely to add to optimism about the outlook for interest rates.
Following yesterday’s tamer-than-expected consumer price inflation data, the Labor Department released a report this morning unexpectedly showing a modest decrease by producer prices in the month of May.
The report said the producer price index for final demand dipped by 0.2 percent in May after climbing by 0.5 percent in April. Economists had expected producer prices to inch up by 0.1 percent.
The report also said the annual rate of producer price growth slowed to 2.2 percent in May from an upwardly revised 2.3 percent in April.
Economists had expected the annual rate of producer price growth to accelerate to 2.5 percent from the 2.2 percent originally reported for the previous month.
The Labor Department also released a separate report showing an unexpected increase by first-time claims for U.S. unemployment benefits in the week ended June 8th.
The report said initial jobless claims climbed to 242,000, an increase of 13,000 from the previous week’s unrevised level of 229,000. Economists had expected jobless claims to edge down to 225,000.
With the unexpected increase, jobless claims reached their highest level since hitting 248,000 in the week ended August 12, 2023.
“The latest data in hand nudge the door a little wider open for the Fed to begin making an interest rate cut later this year,” said Bill Adams, Chief Economist for Comerica Bank. “Comerica forecasts for the Fed to make its first cut of this cycle in September, followed by a second cut in December.”
While the data has generated some hopes Fed officials were being conservative when they forecast just one rate cut this year, traders may be reluctant to continuing buying stocks following yesterday’s surge.
Sector News
Airline stocks have pulled back sharply after soaring in the previous session, resulting in a 2.2 percent nosedive by the NYSE Arca Airline Index.
Substantial weakness has also emerged among oil service stocks, as reflected by the 2.0 percent slump by the Philadelphia Oil Service Index. The weakness among oil service stocks comes despite a modest increase by the price of crude oil.
Gold stocks have also shown a significant move to the downside amid a pullback by the price of the precious metal, with the NYSE Arca Gold Bugs Index falling by 1.5 percent.
Steel, natural gas and brokerage stocks are also seeing notable weakness, while strength among semiconductor and computer hardware stocks is contributing to the modest gain being posted by the tech-heavy Nasdaq.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in yet another mixed performance on Thursday. Japan’s Nikkei 225 Index fell by 0.4 percent and China’s Shanghai Composite Index dipped by 0.3 percent, while Hong Kong’s Hang Seng Index and South Korea’s Kospi both jumped by 1.0 percent.
Meanwhile, the major European markets have all moved to the downside on the day. While the U.K.’s FTSE 100 Index has slid by 0.8 percent, the German DAX Index and the French CAC 40 Index are down by 1.9 percent and 2.0 percent, respectively.
In the bond market, treasuries are seeing modest strength after moving sharply higher over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.4 basis points at 4.281 percent.
Business News
U.S. Stocks Turning In Lackluster Performance Following Yesterday’s Rally
2024-06-13 15:00:48
