After moving sharply higher over the past few sessions, stocks turned in a relatively lackluster performance during trading on Thursday. The major averages spent most of the session modestly below the unchanged line but ended the day narrowly mixed.
The Dow climbed well off its worst levels of the day in late-day trading but still closed down 45.74 points or 0.1 percent at 34,945.47. The blue chip index edged down of the three-month closing high set on Wednesday.
Meanwhile, the Nasdaq crept up 9.84 points or 0.1 percent to 14,113.67, its best closing level in well over three months, and the S&P 500 inched up 5.36 points or 0.1 percent to a more than two-month closing high of 4,508.24.
A steep drop by shares of Walmart (WMT) weighed on the Dow, with the retail giant plunging by 8.1 percent after ending Wednesday’s trading at a record closing high.
The pullback by Walmart came after the company reported better than expected fiscal third quarter results but forecast full-year earnings toward the low end of analyst estimates.
Dow component Cisco Systems (CSCO) also plunged by 9.8 percent after the networking giant reported fiscal first quarter results that beat estimates but lowered its full-year revenue forecast.
Meanwhile, the upticks by the Nasdaq and S&P 500 came as the latest batch of U.S. economic data added to recent optimism about the outlook for interest rates.
The Labor Department released a report showing U.S. import and export prices both fell by more than expected in the month of October, capping off an encouraging week of inflation data.
The report said import prices slid by 0.8 percent in October after climbing by an upwardly revised 0.4 percent in September.
Economists had expected import prices to decrease by 0.3 percent compared to the 0.1 percent uptick originally reported for the previous month.
Meanwhile, the Labor Department said export prices slumped by 1.1 percent in October after rising by a downwardly revised 0.5 percent in September.
Export prices were expected to decline by 0.5 percent compared to the 0.7 percent increase originally reported for the previous month.
A separate Labor Department report showing initial jobless claims climbed by much more than expected in the week ended November 11th.
The Labor Department said initial jobless claims rose to 231,000, an increase of 13,000 from the previous week’s revised level of 218,000.
Economists had expected jobless claims to inch up to 220,000 from the 217,000 originally reported for the previous week.
With the bigger than expected, jobless claims reached their highest level since hitting 232,000 in the week ended August 19th.
“The claims data are consistent with a job market that is cooling enough to keep rate hikes off the table, but too strong to make rate cuts a consideration any time soon,” said Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics.
She added, “The Fed is surely encouraged by recent inflation data but needs to see a further slowdown in the labor market and wage growth to be persuaded that inflation is on a sustainable path back to 2%.”
The Federal Reserve also released a report showing industrial production fell by more than expected in October due in part to the strikes at several major motor vehicle manufacturers
Sector News
Energy stocks showed a substantial move to the downside on the day, with a steep drop by the price of crude oil weighing the sector.
With crude for December delivery plummeting $3.76 to $72.90 a barrel, the Philadelphia Oil Service Index dove by 3.6 percent and the NYSE Arca Oil Index tumbled by 2.4 percent.
Cisco led the networking sector lower on the day, dragging the NYSE Arca Networking Index down 3.3 percent. The index ended Wednesday’s trading at its best closing level in over a month.
Palo Alto Networks (PANW) is also posting a steep loss after reporting better than expected fiscal first quarter earnings but provided disappointing billings guidance.
Airline and retail stocks also saw significant weakness, while gold stocks moved notably higher along with the price of the precious metal.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index fell by 0.3 percent, while Hong Kong’s Hang Seng Index tumbled by 1.4 percent.
Most European stocks also moved to the downside on the day. The U.K.’s FTSE 100 Index slumped by 1.0 percent and the French CAC 40 Index slid by 0.6 percent, although the German DAX Index bucked the downtrend and edged up by 0.2 percent.
In the bond market, treasuries showed a notable rebound following the pullback seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slid 9.0 basis points to 4.445 percent.
Looking Ahead
The U.S. economic calendar is relatively quiet on Friday, although a report on new residential construction may attract attention along with remarks by several Fed officials.
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