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Wall Street closed lower on Thursday as market participants digested economic data, which fueled recession concerns. The Dow Jones, the S&P 500, and the Nasdaq ended the day in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 1.2% or 494.82 points to close at 40,347.97. Notably, 21 components of the 30-stock index ended in negative territory, while 9 ended in positive zone.
The tech-heavy Nasdaq Composite declined 405.25 points, or 2.3%, to close at 17,194.15.
The S&P 500 tumbled 75.62 points, or 1.4%, to close at 5,446.68. Six of the 11 broad sectors of the benchmark index closed in the red. The Technology Select Sector SPDR (XLK), the Energy Select Sector SPDR (XLE) and the Consumer Discretionary Select Sector SPDR (XLY) fell 3.7%, 2.7% and 2.5%, respectively.
The fear-gauge CBOE Volatility Index (VIX) was up 13.6% to 18.59. A total of 14.15 billion shares were traded on Thursday, higher than the last 20-session average of 11.71 billion. The S&P 500 posted 54 new 52-week highs and 7 new lows; the Nasdaq Composite recorded 65 new highs and 177 new lows.
Economic Data Spurs Recession Fears
Wall Street experienced a significant decline on Thursday as growing concerns about a potential recession. The decline was mainly caused by figures that showed weaknesses in both the manufacturing industry and the job market.
The Institute of Supply Management (ISM) reported that the manufacturing index came in at 46.8% in July, marking an eight-month low. This was a decrease from the previous month's reading of 48.5% and less than the consensus estimates of 48.7%. Notably, any reading below 50 indicates a contraction in manufacturing activities.
Adding to the market's unease, the Labor Department's latest report on jobless claims revealed that new unemployment claims rose to an 11-month high. For the week ending Jul 27, jobless claims totaled 249,000, increasing 14,000 from the previous week’s unrevised level of 235,000. The four-week moving average was 238,000, an increase of 2,500 from the previous week’s unrevised average of 235,500.
Continuing claims came in at 1,877,000, an increase of 33,000 from the previous week’s revised level of 1,844,000. The 4-week moving average was 1,857,000, an increase of 5,250 from the previous week's revised average of 1,851,750.
The combined impact of rising jobless claims and a contracting manufacturing sector has amplified fears of an impending recession. Market participants are increasingly concerned that the Federal Reserve's monetary policy adjustments, aimed at curbing inflation, may have been implemented too late to prevent an economic downturn. This lack of clarity has added to the volatility in markets.
Construction Spending Drops for Second Month
Construction spending declined 0.3% in June, in contrast to the consensus estimate of an increase of 0.2%. Construction spending dropped 0.4% in May.
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Stock Market News for Aug 2, 2024
Market News
Wall Street closed lower on Thursday as market participants digested economic data, which fueled recession concerns. The Dow Jones, the S&P 500, and the Nasdaq ended the day in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 1.2% or 494.82 points to close at 40,347.97. Notably, 21 components of the 30-stock index ended in negative territory, while 9 ended in positive zone.
The tech-heavy Nasdaq Composite declined 405.25 points, or 2.3%, to close at 17,194.15.
The S&P 500 tumbled 75.62 points, or 1.4%, to close at 5,446.68. Six of the 11 broad sectors of the benchmark index closed in the red. The Technology Select Sector SPDR (XLK), the Energy Select Sector SPDR (XLE) and the Consumer Discretionary Select Sector SPDR (XLY) fell 3.7%, 2.7% and 2.5%, respectively.
The major loser of the S&P 500 Index was Moderna, Inc. (MRNA - Free Report) after its shares fell 21%. Moderna currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The fear-gauge CBOE Volatility Index (VIX) was up 13.6% to 18.59. A total of 14.15 billion shares were traded on Thursday, higher than the last 20-session average of 11.71 billion. The S&P 500 posted 54 new 52-week highs and 7 new lows; the Nasdaq Composite recorded 65 new highs and 177 new lows.
Economic Data Spurs Recession Fears
Wall Street experienced a significant decline on Thursday as growing concerns about a potential recession. The decline was mainly caused by figures that showed weaknesses in both the manufacturing industry and the job market.
The Institute of Supply Management (ISM) reported that the manufacturing index came in at 46.8% in July, marking an eight-month low. This was a decrease from the previous month's reading of 48.5% and less than the consensus estimates of 48.7%. Notably, any reading below 50 indicates a contraction in manufacturing activities.
Adding to the market's unease, the Labor Department's latest report on jobless claims revealed that new unemployment claims rose to an 11-month high. For the week ending Jul 27, jobless claims totaled 249,000, increasing 14,000 from the previous week’s unrevised level of 235,000. The four-week moving average was 238,000, an increase of 2,500 from the previous week’s unrevised average of 235,500.
Continuing claims came in at 1,877,000, an increase of 33,000 from the previous week’s revised level of 1,844,000. The 4-week moving average was 1,857,000, an increase of 5,250 from the previous week's revised average of 1,851,750.
The combined impact of rising jobless claims and a contracting manufacturing sector has amplified fears of an impending recession. Market participants are increasingly concerned that the Federal Reserve's monetary policy adjustments, aimed at curbing inflation, may have been implemented too late to prevent an economic downturn. This lack of clarity has added to the volatility in markets.
Construction Spending Drops for Second Month
Construction spending declined 0.3% in June, in contrast to the consensus estimate of an increase of 0.2%. Construction spending dropped 0.4% in May.