U.S. stock markets closed mixed in Thursday’s session as investors continued to take note of the U.S. Federal Reserve’s comments on potential rate hikes and inflation expectations while heavyweight technology shares rallied, prompted by falling Treasury yields. A higher-than-expected rise in initial jobless claims for the week-ended Jun 12 also dampened the confidence of market participants. Notably, the Dow and S&P 500 ended the day in red while the Nasdaq Composite closed the day in green.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.6%, or 210.22 points, closing at 33,823.45, continuing its losses for the fourth consecutive session. Notably, 18 components of the 30-stock index ended in red while 12 finished the day in green. Major loser of the Dow was Caterpillar Inc. CAT that lost 3.6%. Notably, Caterpillar carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The tech-heavy Nasdaq Composite closed the day at 14,161.35, up 0.9%, or 121.67 points, snapping its two-day losing streak, on the back of strong performance by large-cap technology stocks. The S&P 500 fell 1.84 points, closing the day at 4,221.86, falling for the third consecutive session. The Financials Select Sector SPDR (XLF) dipped nearly 3% while the Technology Select Sector SPDR (XLK) and the Health Care Select Sector SPDR (XLV) rose 1.2% and 0.8%, respectively. Notably, seven out of eleven sectors of the benchmark index closed in the positive zone and four in red.
The fear-gauge CBOE Volatility Index (VIX) was down 2.2% to 17.75. A total of 11.77 billion shares were traded on Thursday, higher than the last 20-session average of 10.67 billion.
Dow and S&P 500 Slid Post Fed Comments While Nasdaq Rallied
Wall Street ended Thursday’s session on a mixed note as the Dow and S&P 500 closed lower. Notably, on Wednesday, the U.S. Federal Reserve’s dot plot of projections showed that 13 members of the Federal Open Market Committee were of the belief that the Fed could increase interest rates in 2023. Moreover, majority of them believed that the Fed will hike the interest rates at least twice in 2023. Furthermore, the Fed raised its headline inflation projection to 3.4% in 2021, compared to its previous forecast of 2.4%.
Nonetheless, the tech-laden Nasdaq Composite gained in Thursday’s session, boosted by a rally in high-flying technology growth shares, following a drop in longer-term U.S. Treasury yields. Notably, shares of heavyweight technology companies like Microsoft Corp. MSFT and Apple Inc. AAPL rose 1.4% and 1.3%, respectively.
Investors’ sentiment was also dampened in Thursday’s session after the U.S. Department of Labor reported that initial jobless claims increased by 37,000 to 412,000 for the week-ended Jun 12. The consensus estimate was 360,000 and the previous week’s data was revised downward by 1,000 to 375,000 from 376,000 reported earlier.
Continuing claims (people who are already receiving benefits) increased by 1,000 to 3,518,000 for the week-ended Jun 5 from the prior week’s revised level. The previous week’s level was revised upward by 18,000 to 3,517,000 from 3,499,000 reported earlier.
The four-week moving average for continuing claims decreased by 55,000 to 3,603,750. Notably, this marked the lowest level for the average since Mar 21, 2020 when it was reported at 2,071,750. The prior week’s average was revised upward by 7,500 to 3,658,750 from 3,651,250 reported earlier.
The Conference Board reported that the Leading Economic Index for the United States increased 1.3% in May to 114.5, surpassing the consensus estimate of an increase of 1.2%, and compared to an increase of 1.3% in April, which was revised downward from 1.6% increase reported earlier. Moreover, the report stated that the Coincident Economic Index for the United States rose 0.4% in May to 105.1, following a rise of 0.3% in April. Meanwhile, the Lagging Economic Index for the United States decreased 2.2% in May to 103.0, compared to an increase of 3% in April.
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