U.S. stocks struggled to find their bearings on Thursday after capping a four-day rally to close lower in the previous session amid faded optimism around ceasefire talks between Russia and the United States. Ukraine and mixed economic data.
The S&P 500 fell about 0.2% and the Dow Jones Industrial Average fell 100 points. The Nasdaq Composite edged down 0.2%. The moves come after the S&P 500 and Dow each snapped four-day winning streaks on Wednesday. The Nasdaq lost momentum after closing Tuesday at its highest levels since mid-January. Oil prices fell sharply early Thursday after surging higher the previous trading day for the first time in three sessions as hopes of a de-escalation in the war in Eastern Europe faded. WTI crude oil futures fell 4.7% to around $103 a barrel.
Russian forces continued attacks on Kyiv and northern Ukraine Despite reports, Moscow pledged to ease its military action in the regions during peace talks in Istanbul earlier this week. On Wednesday, the number of people in Ukraine who fled their homes to escape the invasion and seek safety reached 4 million, according to the The United Nations.
Equities have had a rocky start to the year as a number of headwinds – geopolitical unrest, rising inflation, supply chain imbalances and central bank monetary tightening – rattle financial markets. Still, the S&P 500 is up 11% from its year low in early March as of Tuesday’s close and just 4% away from hitting a new all-time high after a recent rally. Based on more than seven decades of data, the momentum should continue even despite some daily instabilities.
“The good news is that stocks seem to be really liking April,” Ryan Detrick, chief financial market strategist at LPL Financial, said in a note, noting that the month has closed in green every year since 2006, with the exception of of 2012. “Not only is it the best month on average since 1950, it’s also been higher, an incredible 15 of the last 16 years as well.
Despite a reassuring outlook for the coming month, another historical record worries market players. Investors nervously eye a flattening of the US Treasury yield curve, with longer-dated bond yields falling more sharply than short-dated ones, traders betting on higher Federal Reserve rates in the short term and weighing a clouded longer-term macroeconomic outlook. -term.
The spread, or difference, between 2-year and 10-year Treasury yields narrowed to its lowest level since 2019 earlier this week and briefly reversed on Tuesday. The phenomenon has a habit of predicting a recession, each of the last eight recessions dating back to 1969 preceded by an inversion of the yield curve.
“We want to make sure that we don’t focus too much on yield curve issues where some people think that signals a recession,” Advisors Capital Management partner and portfolio manager JoAnne Feeney told Yahoo Finance Live, however. . “We think it’s very dangerous at this point to use historical episodes of yield curve inversions to try to predict what’s going to happen now.”
Feeney pointed to near-record job openings (the Department of Labor’s Job Openings and Labor Turnover Summary [JOLTS] came in at 11.283 million in January) and said the US economy was still emerging from COVID and COVID-like behavior.
More employment data is in the works this week. The Labor Department’s weekly jobless claims due out Thursday are expected to show initial jobless claims again near a 50-year low, with consensus economists forecasting a reading of 196,000, according to Bloomberg data. Unemployment claims will serve as a prelude to the even bigger monthly unemployment report for March on Friday, which is expected to show another robust reading of 490,000 payrolls added, according to Bloomberg economist estimates. In a busy week for labor market reports, ADP also reported on Wednesday that private sector payrolls rose by 455,000 over the past month as the economy grapples with labor shortages. persistent labor and widespread vacancies.
11:56 a.m. ET: Occidental Petroleum achieves the best quarter in its history
Occidental Petroleum Corp. (OXY) posted a more than 100% gain in the first quarter of 2022, making the oil giant the top performer in the first quarter of the S&P 500.
The win followed a boost from Warren Buffett’s Berkshire Hathaway Inc., which bought an additional 18.1 million shares of Occidental to put the company’s total stake in the oil giant at nearly 15%.
The positive quarter marks a turnaround for the company, which has struggled for years. Stocks have soared 101% in the past three months as oil jumped over $100 a barrel. The gains mark Occidental’s best-ever quarter.
OXY was up about 2.2% at $58.75 per share as of 11:56 a.m. ET.
11:44 a.m. ET: US inflation-adjusted spending falls as rising prices weigh on demand
Inflation-adjusted consumer spending in the United States fell in February, indicating that soaring prices are dampening demand.
The Commerce Department reported Thursday that purchases of goods and services, adjusted for price changes, fell 0.4% from the previous month after posting a 2.1% jump in January.
Spending on goods fell after a sharp increase the previous month, while a downward trend in COVID-19 cases boosted spending on services.
The personal consumption expenditure price index, a gauge used by the Federal Reserve for its inflation target, rose 0.6% from the previous month and 6.4% from February 2021. This increase marks the biggest jump since 1982. Spending rose 0.2% from January, while revenue rose 0.5%, not adjusted for inflation.
Economists polled by Bloomberg called for a 0.2% drop in inflation-adjusted spending from the previous month and a 6.4% rise in the price index from a year ago .
9:30 am ET: Stocks struggle for direction after capping 4-day rally
Here’s how the major Wall Street benchmarks opened the session on Thursday:
S&P 500 (^GSPC): -6.82 (-0.15%) to 4,595.63
Dow (^ DJI): -98.72 (-0.28%) to 35,130.09
Nasdaq (^IXIC): +0.03 (+0.00%) to 14,442.31
Raw (CL=F): -$4.61 (-4.28%) at $103.21 per barrel
Gold (CG=F): +$3.70 (+0.19%) at $1,942.70 per ounce
10-year cash flow (^TNX): -3.5 bps for a yield of 2.3230%
8:30 a.m. ET: New jobless claims rise slightly to 202,000 after hitting 50-year low
Unemployment insurance claims rose slightly in the latest weekly data after hitting a more than 50-year low as employers continued to be reluctant to cut staff in today’s competitive job market.
The Labor Department’s latest weekly jobless claims report showed 202,000 claims were filed in the week ended March 26, surpassing the 196,000 economists surveyed by Bloomberg.
Weekly jobless claims rose slightly for the first time in three weeks, but rose only marginally from multi-decade lows set last week. At 188,000, last week’s tally for new jobless claims marked the lowest level since September 1969.
The job market remained a strong point of the US economy, with job vacancies still high but down from record highs as more workers join the workforce from the sidelines.
8:26 a.m. ET: Walgreens beats estimates on vaccine rush boost and Omicron-led testing
Walgreens Boots Alliance Inc. (WBA) reported better-than-expected quarterly earnings and sales for its fiscal second quarter results on strong demand for COVID-19 vaccines and tests during the spike in COVID-19 cases directed by Omicron earlier this year.
The pharmacy chain administered 11.8 million vaccines and 6.6 million tests in the period ending February 28. Walgreens plans to perform 30 million vaccinations this year at its sites.
The company’s U.S. pharmacy, however, fell 3.3% in the quarter, hurt by weak performance at its AllianceRx Walgreens mail-order business. Total sales rose 3% to $33.77 billion, beating estimates of $33.40 billion.
Excluding items, the company earned $1.59 per share, compared to Bloomberg consensus estimates of $1.37 per share.
Shares were down 2% at $46.50 apiece in premarket trading at 8:26 a.m. ET.
7:11 a.m. ET: Contracts on the S&P 500, Dow and Nasdaq little changed
Here are the main moves in the markets ahead of Thursday’s open:
S&P 500 Futures Contracts (ES=F): +3.25 points (+0.07%) to 4,599.25
Dow futures (JM=F): -12.00 points (-0.03%) at 35,105.00
Nasdaq futures contracts (NQ=F): +47.00 points (+0.13%) to 15,118.50
Raw (CL=F): -$6.95 (-06.46%) at $100.85 per barrel
Gold (CG=F): -$4.80 (-0.25%) at $1,934.20 per ounce
10-year cash flow (^TNX): 0.00 bp for a yield of 2.3580%
6:46 p.m. ET Wednesday: Futures open flat ahead of last trading day of March
Here’s where major stock index futures opened ahead of Wednesday’s overnight session:
S&P 500 Futures Contracts (ES=F): +4.50 points (+0.10%) to 4,600.50
Dow futures (JM=F): +11.00 points (+0.03%) to 35,128.00
Nasdaq futures contracts (NQ=F): +31.25 points (+0.21%) to 15,102.75
Raw (CL=F): -0.32$ (-0.30%) at 107.50$ per barrel
Gold (CG=F): $0.00 (0.00%) at $1,933.50 per ounce
10-year cash flow (^TNX): -4.2 bps for a yield of 2.3580%
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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