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Wall Street closed marginally lower on Thursday, pulled down by consumer staples and energy stocks. Economic data released through the day reflected a resilient economy, raising the risk of further rate hikes by the Fed. All of the three major stock indexes ended slightly in the red.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell less than 0.1%, remaining virtually flat at 33,119.57. Fifteen components of the 30-stock index ended in positive territory, while 15 ended in negative.
The tech-heavy Nasdaq Composite dropped 16.18 points or 0.1% to close at 13,219.83.
The S&P 500 lost 5.56 points, or 0.1%, to close at 4,258.19. Seven of the 11 broad sectors of the benchmark index closed in the red, while four ended in the green. The Consumer Staples Select Sector SPDR (XLP), the Materials Select Sector SPDR (XLB) and the Energy Select Sector SPDR (XLE) slid 2%, 1.2% and 0.6%, respectively, while the Real Estate Select Sector SPDR (XLRE) gained 0.7%.
The fear-gauge CBOE Volatility Index (VIX) decreased 0.5% to 18.49. A total of 9.8 billion shares were traded on Thursday, lower than the last 20-session average of 10.6 billion. Decliners outnumbered advancers on the NYSE by a 1.11-to-1 ratio. On the Nasdaq, declining issues led advancers by 1.02-to-1.
Initial Claims & Trade Deficit Project a Resilient Economy
On Thursday, key economic numbers released in the session added fuel to investor apprehension about the Fed raising interest rates in the near future. The economy continued to show resilience instead of what the central bank actually wanted to see — a slowdown. While this bodes well for the U.S. economy in general, we are currently back in the “good news is bad news” zone. For the Fed to be convinced that its tight monetary policy is taking effect, sectoral numbers have to reflect a gloom, which they are not. Focus is usually on the labor market, which continues to hold steady and defy the Fed’s expectations.
The Labor Department said on Thursday that initial jobless claims rose to 207,000, increasing 2,000 for the week ending Sep 30. The previous week's level was revised up by 1,000 from 204,000 to 205,000. The four-week moving average decreased to 208,750, marking a fall of 2,500 from the previous week. The previous week's average was revised up by 250 to 211,250.
Continuing claims came in at 1,664,000 for the week ending Sep 23, decreasing 1,000 from the previous week’s revised level. The previous week's numbers were revised down by 5,000 from 1,670,000 to 1,665,000. The four-week moving average was 1,667,500, a decrease of 5,000 from the previous week's revised average. The previous week's average was revised down by 1,250 from 1,673,750 to 1,672,500.
Also, The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced that the U.S. trade deficit had come in at $58.3 billion for August, down $6.4 billion from the revised $64.7 billion for July. Earlier, the July number was reported to be $65 billion.
Oil Prices Continue to Fall on Demand Worries
Oil prices continued their decline on Thursday, falling about 2% following Wednesday’s landslide. Even as there was supply-side pressure re-iterated by the OPEC+ which intends to maintain the current, low production levels, the slump is being attributed to the lack of demand seen in the market due to the weather.
Brent crude settled $1.74, or 2.03%, lower at $84.07/barrel, while WTI crude closed at $1.91, or 2.3%, lower at $82.31/barrel for the day.
Image: Bigstock
Stock Market News for Oct 6, 2023
Wall Street closed marginally lower on Thursday, pulled down by consumer staples and energy stocks. Economic data released through the day reflected a resilient economy, raising the risk of further rate hikes by the Fed. All of the three major stock indexes ended slightly in the red.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell less than 0.1%, remaining virtually flat at 33,119.57. Fifteen components of the 30-stock index ended in positive territory, while 15 ended in negative.
The tech-heavy Nasdaq Composite dropped 16.18 points or 0.1% to close at 13,219.83.
The S&P 500 lost 5.56 points, or 0.1%, to close at 4,258.19. Seven of the 11 broad sectors of the benchmark index closed in the red, while four ended in the green. The Consumer Staples Select Sector SPDR (XLP), the Materials Select Sector SPDR (XLB) and the Energy Select Sector SPDR (XLE) slid 2%, 1.2% and 0.6%, respectively, while the Real Estate Select Sector SPDR (XLRE) gained 0.7%.
The fear-gauge CBOE Volatility Index (VIX) decreased 0.5% to 18.49. A total of 9.8 billion shares were traded on Thursday, lower than the last 20-session average of 10.6 billion. Decliners outnumbered advancers on the NYSE by a 1.11-to-1 ratio. On the Nasdaq, declining issues led advancers by 1.02-to-1.
Initial Claims & Trade Deficit Project a Resilient Economy
On Thursday, key economic numbers released in the session added fuel to investor apprehension about the Fed raising interest rates in the near future. The economy continued to show resilience instead of what the central bank actually wanted to see — a slowdown. While this bodes well for the U.S. economy in general, we are currently back in the “good news is bad news” zone. For the Fed to be convinced that its tight monetary policy is taking effect, sectoral numbers have to reflect a gloom, which they are not. Focus is usually on the labor market, which continues to hold steady and defy the Fed’s expectations.
The Labor Department said on Thursday that initial jobless claims rose to 207,000, increasing 2,000 for the week ending Sep 30. The previous week's level was revised up by 1,000 from 204,000 to 205,000. The four-week moving average decreased to 208,750, marking a fall of 2,500 from the previous week. The previous week's average was revised up by 250 to 211,250.
Continuing claims came in at 1,664,000 for the week ending Sep 23, decreasing 1,000 from the previous week’s revised level. The previous week's numbers were revised down by 5,000 from 1,670,000 to 1,665,000. The four-week moving average was 1,667,500, a decrease of 5,000 from the previous week's revised average. The previous week's average was revised down by 1,250 from 1,673,750 to 1,672,500.
Also, The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced that the U.S. trade deficit had come in at $58.3 billion for August, down $6.4 billion from the revised $64.7 billion for July. Earlier, the July number was reported to be $65 billion.
Oil Prices Continue to Fall on Demand Worries
Oil prices continued their decline on Thursday, falling about 2% following Wednesday’s landslide. Even as there was supply-side pressure re-iterated by the OPEC+ which intends to maintain the current, low production levels, the slump is being attributed to the lack of demand seen in the market due to the weather.
Brent crude settled $1.74, or 2.03%, lower at $84.07/barrel, while WTI crude closed at $1.91, or 2.3%, lower at $82.31/barrel for the day.
Consequently, shares of Devon Energy Corporation (DVN - Free Report) and Callon Petroleum Company fell 1.2% and 1.1%, respectively. Both carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.