Investors weighed mainly favorable U.S. economic data, corporate results, and a second day of testimony by Federal Reserve Chairman Jerome Powell as they lost ground Thursday, with the S&P 500 and Nasdaq Composite plunging to session lows in midafternoon trade.How are stock benchmarks trading?
The Dow Jones Industrial Average (DJIA) is a stock market index
DJIA,
0.05 percent increase
The Dow Jones Industrial Average fell 24.08 points, or 0.1 percent, to 34,909.15.
The S&P 500 is a stock market index that measures how well
SPX,
minus 0.46 percent
The Dow Jones Industrial Average dropped 23.23 points, or 0.5 percent, to 4,351.07.
The Nasdaq Composite Index (Nasdaq) is a stock
COMP,
minus 0.92 percent
The stock dropped 148.50 points, or 1%, to 14,496.45.
The Dow Jones Industrial Average increased 44.44 points, or 0.1 percent, to 34,933.23; the S&P 500 index rose 5.09 points, or 0.1 percent, to 4,374.30; and the Nasdaq Composite Index fell 32.70 points, or 0.2 percent, to 14,644.95.
What is the market’s driving force? After a batch of mainly optimistic economic statistics, including a drop in new unemployment benefit applications to a new historic low, stocks initially struggled to find direction. In the seven days ending July 10, initial jobless claims declined by 26,000 to 360,000, matching the prediction of analysts polled by The Wall Street Journal. Global economic statistics was also in the spotlight, with China’s GDP increasing at a still-impressive 7.9% year-on-year in the second quarter. That was down from the previous quarter’s 18.3 percent increase, which was exacerbated by the fact that the world’s second-largest economy closed factories, markets, and offices to combat the coronavirus in early 2020. Powell told the Senate Banking Committee that inflation has risen significantly and will likely remain high for a few months before reducing, repeating his warning from the previous day when he spoke before a House panel. Powell said Wednesday that the central bank was not in a rush to reduce its monthly purchases of Treasurys and mortgage-related assets, which are currently at $120 billion, because the economy is still “a long way off” from meeting the Fed’s self-described goals of “substantial further progress.” “While the Fed has begun ‘considering’ tapering, we believe it remains committed to a cautious and gradual policy approach, with the Fed primarily embracing indicators of more persistent inflation and labor market recovery,” he wrote. The big concern currently plaguing financial markets is how long pricing pressures will last. In a Thursday research note, Michael Hewson, chief market analyst at CMC Markets UK, wrote, “These nagging concerns about inflation, transitory or otherwise, have continued to dominate sentiment, while worries over the pace and persistence of rising prices appear to be tempering optimism over the wider global recovery story.” In a webcast, Chicago Fed President Charles Evans said the central bank will have a better picture of inflation’s course by the end of the year. He, like other top Fed officials, has blamed the recent rise in the cost of living on the economy’s reopening and the ensuing supply and labor constraints. The Philadelphia Fed’s factory index decreased to 21.9 in June from 30.7 the previous month, according to other economic data. Separately, the Empire State Index of the New York Fed rose 25.6 points to a new high of 43 in July. According to a poll conducted by The Wall Street Journal, economists projected a reading of 17.3. Any reading above zero on each index implies that things are getting better. The Federal Reserve said Thursday that industrial production in the United States increased by 0.4 percent in June, but a scarcity of semiconductors contributed to a 6.6 percent reduction in vehicle and part manufacturing. Industrial output increased 0.8 percent in the month, excluding vehicles. Meanwhile, the proliferation of the coronavirus delta strain was causing concern on Wall Street. Dr. Francis Collins, director of the National Institutes of Health, told CNN on Wednesday that the “delta variant is spreading, people are dying, and we can’t actually just wait for things to get more rational.” “We’re losing time here,” the public health professional said as the US vaccine program slowed, with only 48.2 percent of the population fully immunized, according to a tracker from the Centers for Disease Control and Prevention. Which businesses are being scrutinized?
GME shares of GameStop Corp. fell 3.3 percent after Netflix Inc. NFLX has made its first major videogame hire, possibly indicating a shift away from its streaming-video roots.
Morgan Stanley’s stock
MS,
minus 0.22 percent
were down 0.6 percent after the brokerage and money management firm announced earnings and revenue that above estimates but trading revenue that fell short of projections.
UnitedHealth Group Inc. (UNH) is a health-care company based in the United States. UNH jumped 1.4 percent after the healthcare provider posted better-than-expected second-quarter profit and revenue and improved its full-year estimate, although continuing to expect COVID-19 to eat into results.
Ross Stores Inc. is a retailer that operates in the United States. ROST announced late Wednesday that Chief Financial Officer Travis Marquette has resigned, effective immediately, to take a position with an unnamed company. The stock price dropped by more than 1%.
What is the state of other markets?
The 10-year Treasury note’s yield
TMUBMUSD10Y,
1.298 percentage point
The yield on the 10-year Treasury note declined 3.5 basis points to 1.303 percent. Bond prices and yields move in opposite directions.
The ICE US Dollar Index is a measure of the value of the dollar in the United States.
DXY,
+0.24 percent, +0.24 percent, +0.24 percent, +0.24 percent
The currency’s value versus a basket of six main rivals increased by 0.3 percent.
Oil futures fell, with the benchmark in the United States falling the most.
CL00,
minus 2.01 percent
gold futures are down 1.5 percent.
GC00,
0.27 percent increase
The price of gold increased by $4, or 0.2 percent, to $1,829 per ounce.
The Stoxx Europe 600 index of European stocks
SXXP,
minus 0.95 percent
The FTSE 100 index in London dropped 0.9 percent.
UKX,
minus 1.12 percent
The price of the stock fell by 1.1 percent.
The Shanghai Composite Index is a stock market index in Asia.
SHCOMP,
+1.02 percent
The Hang Seng Index increased by 1%.
HSI,
0.75 percent increase
The Nikkei 225 index in Japan gained 0.8 percent.
NIK,
minus 1.15 percent
The price of the stock dropped by 1.2 percent./n
