U.S. stock indexes on Thursday were mostly lower, though the Dow industrials were flirting with a jaunt into positive territory, as investors weighed a better-than expected report on those seeking unemployment benefits insurance which carved out a new pandemic-era low.
How are stock benchmarks trading?
The Dow Jones Industrial Average
turned higher in midday trade, up 40 points, or 0.1%, to 35,793, after touching an intraday low at 35,577.14.
The S&P 500
was off 12 points, or 0.3%, to reach 4,689.43, remaining within range of its record closing high at 4,704.54.
The Nasdaq Composite Index
meanwhile, declined 0.8%, or 123 points, to reach 15,664, after briefly turning positive near Thursday’s open.
On Wednesday, the Dow rose 35 points, or 0.1%, to 35,755, the S&P 500 added 0.3%, or 14 points, to 4,701, and the Nasdaq Composite gained 100 points, or 0.6%, to 15,787. The preliminary data from Pfizer
showing their vaccine at three doses was effective against the omicron variant of coronavirus has further calmed market fears.
What’s driving the market?
Thursday’s uneven trading action comes after three straight days of gains for equities that have brought the S&P 500 index within range of a record close, as investors shook off concerns about the omicron variant of the coronavirus and saw the downturn as a buying opportunity.
“For longer-term investors, negative news headlines and related market turmoil may present opportunities to add to risk exposures in some cyclical sectors (e.g., travel, leisure, hospitality) and to pare back on more growth-focused sectors such as technology,” wrote Nanette Abuhoff Jacobson, global investment strategist for Hartford Funds, in a recent blog.
Markets on Thursday were also digesting U.S. jobs data that showed new applications for unemployment benefits sank to a 52-year low of 184,000 for the week ended Dec. 4, the Labor Department said Thursday.
However, the big decline—new claims hit the lowest since September 1969—stemmed largely from holiday-related quirks in the data and is somewhat exaggerated.
The slightly more downbeat tone to the market on Thursday may be attributed to an earlier decision by Fitch Ratings to lower the credit rating of highly leveraged home builder China Evergrande
which reignited worries around the Chinese property sector. Fitch cited Evergrande’s nonpayment of coupons on two dollar-denominated bonds.
Markets aren’t likely to gain much more ground higher, as traders appear to be looking ahead to Friday’s November consumer inflation data, which are expected to confirm the pressures that will lead the Federal Reserve to decide to increase the pace of tapering its bond purchases. The policy setting Federal Open Market Committee will meet Dec. 14-15.
“Most indices are now stabilizing, solidifying the recent gains registered after investors started to play down worries over the omicron variant,” said Pierre Veyret, technical analyst at ActivTrades. “The trading environment is however likely to stay significantly volatile as uncertainty remains regarding monetary policies in the U.S., especially after last week’s poor job report and high inflation numbers.”
Which companies are in focus?
- Shares of Altice USA Inc. ATUS took a 5.5% dive in midday trading Thursday toward a 3-year low, and the second-lowest close since going public in June 2017, after longtime bullish analyst Philip Cusick at J.P. Morgan downgraded the telecommunications company.
Brazilian digital bank Nu Holdings
priced its initial public offering on the New York Stock Exchange at $9 per share, valuing the Warren Buffett-backed lender at more than $41 billion. “This will mark one of the biggest publicly listed fintech companies in the world and provide a glimpse into the feasibility of running a large digital only bank,” said analysts at Saxo Bank.
Another high-profile new listing, HashiCorp
priced its IPO at $80, valuing the cloud-based software provider at $14 billion. Shares were trading up 4.8% on Thursday midday.
- Hormel Foods Corp. HRL shares rose nearly 6% in Thursday trade after the food company reported fiscal fourth-quarter sales that beat the Street and reached a record.
How are other assets faring?
- The yield on the 10-year Treasury note TMUBMUSD10Y fell to around 1.49%, from 1.508% Wednesday. Treasury yields and prices move in opposite directions.
- The ICE U.S. Dollar Index DXY, a measure of the currency against a half-dozen other monetary units, was up 0.2% at 96.126.
- In oil futures, West Texas Intermediate crude CL00 for January delivery CLF22 was trading 1% lower at $71.70 a barrel on the New York Mercantile Exchange, pulling back from Wednesday’s two-week high.
- Gold futures GC00 for February delivery GCG22 declined 0.2% at $1,782.50 an ounce.
- The Stoxx Europe 600 Index SXXP closed less than 0.1% lower, while London’s FTSE 100 Index UKX slipped 0.2% on the session.
In Asia, the Shanghai Composite IndexSHCOMP closed 1% higher, while the Hang Seng Index HSI rose 1.1% in Hong Kong and China’s CSI 300 000300 advanced 1.7%. Japan’s Nikkei 225 Index
however, closed down 0.5%.