Stock indexes attempted a two-day slippage at the opening Thursday after a weekly jobless claims report was slightly better than expected. Investors, however, are awaiting a speech from Federal Reserve Chairman Jerome Powell at a noon Wall Street Journal conference where he could provide additional information on the long-term health of the labor market and a recent rise in labor market prices. yields.
The three major benchmarks of equities are trying to avoid a third day of losses, which have been attributed to the steady rise in bond yields in recent weeks.
How are stock market indices performing?
The Dow Jones Industrial Average was trading 170 points, or 0.5%, at 31,439.
The S&P 500 Index gained 17 points to around 3,836, an increase of 0.4%.
The Nasdaq Composite Index rose 69 points, or 0.5%, to around 13,068.
Wednesday, the Dow DJIA,
fell 121.43 points, or 0.4%, to close at 31,270.09, the S&P 500 SPX,
loses 50.57 points, 1.3%, ending at 3819.72, while the Nasdaq COMP composite index,
slipped 361.04 points, or 2.7%, to mark its biggest two-day and percentage drop since Tuesday, September 8, 2020.
What drives the market?
Initial jobless claims for the week ended Feb. 27 rose from 9,000 to 745,000, a smaller increase than estimates of 750,000 to 760,000 expected by economists polled by Econoday and Dow Jones. And new federal unemployment claims totaled 436,696 in the week.
The data comes as the ‘big rotation’ is underway as some analysts describe a shift from high-tech stocks, seen as expensive by some measures, to other areas of the market seen as undervalued, including energy. and finances.
This move was largely precipitated by a recent sale of government bonds, which pushed yields higher as investors appreciate the economic recovery and better times for stocks hit by the pandemic last year. COVID-19, after tech stocks performed well thanks to trade lockdowns. and social distancing protocols last year.
The 10-year US Treasury note TMUBMUSD10Y,
Yielded 1.462%, standing near where it finished trading last Friday, but still representing around its highest rate this year.
Concerns stem from expectations that additional congressional budget support will fuel an inflationary fire that some believe could spark a faster round of interest rate hikes by the Fed.
Powell can address these growing concerns when he speaks at the Wall Street Journal Jobs Summit at 12:05 a.m. EST.
“We suspect that Powell will try to calm the markets again, but today’s macroeconomic news could be difficult for the bond market,” wrote Peter Cardillo, chief market economist at Spartan Capital Securities, in a note from research, referring to the Fed chairman’s biannual testimony in front of congressional lawmakers last week.
“In other words, expect an unstable and volatile market,” the analyst said.
So far, central bank officials have said they are not too concerned about rising bond yields, although they are watching it closely. Powell’s comments will mark the last of Fed officials ahead of a self-imposed “blackout” period ahead of the next two-day policy meeting starting March 16.
Meanwhile, investors are monitoring progress on negotiations over the Biden administration’s $ 1.9 trillion COVID aid package, after Senate Democrats agreed to restrict eligibility for some of the payments on Wednesday. direct that are part of the proposal.
Beyond the claims, a read on productivity and costs showed that US productivity has declined less than previously estimated at the end of 2020. A report on factory orders is scheduled for 10 hours.
What stocks are targeted?
Flipkart, the Indian online retailer primarily owned by Walmart WMT is considering listing in the United States by merging with a special purpose acquisition company, Bloomberg News reported, citing people familiar with the matter. Walmart shares rose 0.4%.
- BJ’s Wholesale Club Holdings Inc. BJ on Thursday reported fiscal fourth quarter earnings, revenue and same-store sales that exceeded expectations as the COVID-19 pandemic gave a boost, without providing a financial outlook given uncertainties related to it to the pandemic. The company’s stock was down 0.4% on Thursday morning.
Discount retailer Burlington Stores Inc. BURL said on Thursday it reported net income of $ 155.9 million, or $ 2.33 per share, in the fourth quarter, compared to $ 206.3 million, or $ 3.08 per share, during the period of the previous year. Burlington shares were up about 11%.
- Ciena Corp. CIEN on Thursday reported fiscal first quarter profit and revenue that exceeded expectations as network revenue fell less than expected, while the company did not provide a financial forecast. Its shares climbed nearly 5%.
Kate Spade, part of the Tapestry Inc. TPR said on Thursday that Nicola Glass, the brand’s creative director, had stepped down from the role, effective April 1. Tapestry shares were down 0.4%.
How are the other assets doing?
The dollar was trading at 0.2%, as measured by the ICE US Dollar DXY index.
Oil futures were higher, with the US benchmark CL.1 up $ 1.06, or 1.7%, to trade at $ 62.31 a barrel. GC00 gold futures fell 0.1%, or $ 2.20, to a nine-month low at $ 1,712.80 an ounce.
Shares fell slightly in Europe, with the pan-European Stoxx 600 SXXP index falling 0.3% and London’s FTSE 100 UKX falling 0.4%.
Stocks fell in Asia: the Shanghai Composite SHCOMP fell 2%, abandoning gains from the previous session, Hong Kong’s Hang Seng HSI index fell 2.2%, and China’s CSI 300,000,300 fell by 3.2%, while Japan’s Nikkei 225 NIK lost 2.1%.