On Thursday, Wall Street closed lower after the Dow Jones breached the $40,000 milestone during trading. Weekly jobless claims fell, providing relief. All three major stock indexes ended in the red.
How did the benchmarks perform?
The Dow Jones Industrial Average (DJI) fell 38.62 points, or 0.1%, to close at 39,869.38. Fifteen stocks in the 30-stock index ended in positive territory, while the other 15 stocks ended in negative territory. However, at some point during the day, the benchmark index crossed the 40,000 mark for the first time in history.
The tech-heavy Nasdaq Composite Index fell 44.07 points (0.3%) to close at 16,698.32.
The S&P 500 fell 11.05 points, or 0.2%, to close at 5,297.10. Nine of the benchmark index’s 11 broad sectors closed in the red. The Materials Select Sector SPDR (XLB), Consumer Goods Select Sector SPDR (XLY), and Industrial Goods Select Sector SPDR (XLI) fell 0.7%, 0.7%, and 0.6%, respectively, while the Consumer Staples Select Sector SPDR (XLP) rose. 1.4%.
The CBOE Volatility Index (VIX), a measure of fear, fell 0.2% to 12.42. Volume on Thursday totaled 17.8 billion shares, higher than the past 20 trading average of 11.5 billion shares. Declining issues outnumbered advancing issues on the New York Stock Exchange by a ratio of 1.2 to 1. On the Nasdaq, declining issues outnumbered advancing issues by a 1.17-to-1 ratio.
Unemployment insurance claims rise to lower limit
The Labor Department said Thursday that the number of new jobless claims for the week ending May 11 fell by 10,000 to 222,000. The previous week’s level was revised upward by 1,000, from 231,000 to 232,000. The four-week moving average was 217,750 cases, an increase of 2,500 cases from the previous week. Last week’s average was revised upward by 250 cases to 215,250 cases.
The number of continuing applications for the week ending May 4 was 1,794,000, an increase of 13,000 from the previous week’s revised figure. The previous week’s level was revised downward by 4,000 cases, from 1,785,000 to 1,781,000. The four-week moving average was 1,779,250, 750 fewer than the previous week’s revised average. The previous week’s average was revised downward by 1,000 people from 1.781 million to 1.78 million.
The jobs report dampened investor mood slightly on speculation that the Fed might not be forced to cut interest rates as quickly as expected. As a result, the benchmark index, which had hit a record high above the previous inflation rate, ended the day in the red.
But investors are now expecting at least two 25 basis point rate cuts this year. According to the CME FedWatch tool, they assume a 70% chance that the first cuts will occur in September.
As a result, shares of Super Micro Computer, Inc. SMCI and Nexstar Media Group, Inc. NXST fell 5% and 2%, respectively. Both currently carry a Zacks Rank #1 (Strong Buy).You can view See the complete list of today’s Zacks #1 Rank stocks here.
economic data
The U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly reported that housing starts increased to 1.36 million in April. The figure for March has been revised downward to 1,287,000 from the previously announced 1,321,000. The number of building permits in April decreased to 1.44 million. The figure for March has been revised upward from the previously announced 1.458 million to 1.485 million.
Capacity utilization fell to 78.4% in April from 78.5% in March, according to the Fed’s report. Industrial production remains unchanged.
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