Stocks moved mostly lower over the course of the trading day on Thursday, giving back ground after trending higher over the past several sessions. The major averages showed a lack of direction early in the session before coming under pressure in the early afternoon.
The major averages climbed off their worst levels going into the close but remained firmly negative. The Dow fell 173.73 points or 0.5 percent to 33,631.14, the Nasdaq slid 85.46 points or 0.6 percent to 13,574.22 and the S&P 500 declined 27.34 points or 0.6 percent to 4,349.61.
A renewed surge by treasury yields weighed on Wall Street, with yields regaining ground following a notable two-day pullback.
The rebound by yields came after the Labor Department released a report showing U.S. consumer prices rose by slightly more than expected in the month of September.
The Labor Department said its consumer price index climbed by 0.4 percent in September after increasing by 0.6 percent in August. Economists had expected consumer prices to rise by 0.3 percent.
Excluding food and energy prices, core consumer prices rose by 0.3 percent in September, matching the increase seen in August as well as economist estimates.
The report also said the annual rate of consumer price growth was unchanged at 3.7 percent, while the annual rate of core consumer price growth slowed to 4.1 percent in September from 4.3 percent in August.
Yields showed a strong move back to the upside even though most economists do not expect the data to convince the Federal Reserve to resume raising interest rates next month.
“As it pertains to Fed policy, today’s CPI data doesn’t provide additional impetus for the Fed to act at the upcoming November 1 meeting,” said Charlie Ripley, Senior Investment Strategist for Allianz Investment Management.
He added, “Overall, consumer price data continues to be on track to moving towards the Fed’s stated two-percent target, but it’s likely we will continue to see some bumps along the way like the small upside surprise today.”
The Labor Department also released a separate report showing first-time claims for U.S. unemployment benefits came in unchanged in the week ended October 7th.
The report said initial jobless claims came in at 209,000, unchanged compared to the previous week’s revised level. Economists had expected jobless claims to inch up to 210,000 from the 207,000 originally reported for the previous week.
Sector News
Housing stocks moved sharply lower over the course of the session, dragging the Philadelphia Housing Sector Index down by 4.0 percent.
Significant weakness was also visible among steel stocks, as reflected by the 2.6 percent slump by the NYSE Arca Steel Index.
Airline stocks also saw considerable weakness despite upbeat earnings from Delta (DAL), resulting in a 2.6 percent nosedive by the NYSE Arca Airline Index.
Tobacco, biotechnology and gold stocks also showed notable moves to the downside, moving lower along with most of the other major sectors.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan’s Nikkei 225 Index surged by 1.8 percent, while China’s Shanghai Composite Index advanced by 0.9 percent.
Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.’s FTSE 100 Index rose by 0.4 percent, the German DAX Index slipped by 0.2 percent and the French CAC 40 Index fell by 0.4 percent.
In the bond market, treasuries came under pressure over the course of the session after seeing initial strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, surged 11.7 basis points to 4.712 percent.
Looking Ahead
Earnings news may move into the spotlight on Friday, with financial giants Citigroup (C), JPMorgan Chase (JPM) and Wells Fargo (WFC) among the companies due to report their quarterly results before the start of trading.
Traders are also likely to keep an eye on a report on import and export prices in September and a preliminary reading on consumer sentiment in October.
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