US Stock Market Today: US stock indices closed lower on Thursday after data pointed to a tight labor market, renewed concerns that the Federal Reserve will continue its aggressive path of rate hikes that could push the economy into recession .
A report from the Labor Department showed that weekly jobless claims were lower than expected, indicating that the job market remains strong despite the Fed’s efforts to stifle demand for workers.
Expectations that the central bank would further reduce the size of its interest rate hikes in its policy announcement next month were unchanged according to the report.
Investors have been looking for signs of weakness in the labor market as a key ingredient needed for the Fed to begin to rein in its policy tightening measures.
Other data showed that manufacturing activity in the mid-Atlantic region eased again in January, while data from the Commerce Department confirmed that the recession in the housing market persisted.
“What we’re seeing is the market bottoming out on uncertainty, so the news has less of an effect and what we’re seeing today is really just a continuation of that,” said Brad McMillan, chief investment officer at Commonwealth Financial Network. , an independent stockbroker in Waltham, Massachusetts.
“The fact that we’re not seeing more reactions says that a lot of the bad news is out there.”
The Dow Jones Industrial Average (.DJI) fell 252.4 points, or 0.76%, to 33,044.56, the S&P 500 (.SPX) lost 30.01 points, or 0.76%, to 3,898, 85 and the Nasdaq Composite (.IXIC) fell 104.74 points, or 0.96%, to 10,852.27.
Recent comments from Fed officials continue to highlight the disconnect between the central bank’s view of its terminal rate and market expectations.
Boston Fed President Susan Collins echoed comments from other policymakers to support the case for interest rates rising beyond 5%.
But stocks moved away from their session lows after Fed Vice Chairman Lael Brainard said the Fed is still “figuring out” the level of interest rates that will be needed to control inflation.
Markets, however, see the terminal rate at 4.89% for June and have heavily priced in a 25 basis point rate hike by the US central bank in February, with rate cuts in the second half. of the year. .
Both the S&P 500 and the Dow fell for the third session in a row, their longest losing streak in a month.
On the earnings front, Procter & Gamble Co.
Analysts now expect year-over-year earnings for S&P 500 companies to decline 2.8% in the fourth quarter, according to Refinitiv data, compared with a 1.6% decline at the start of the year.
Netflix Inc (NFLX.O) closed down 3.23% before its results were released after the closing bell on Thursday. But the stock rallied to gain 3.33% after posting subscriber gains in the quarter and the departure of co-founder Reed Hastings as chief executive to a chief executive role.
Issues going down outnumbered going up on the New York Stock Exchange by a ratio of 1.49 to 1; on Nasdaq, a 1.70-to-1 ratio favored decliners.
The S&P 500 posted 1 new 52-week high and 3 new lows; the Nasdaq Composite posted 46 new highs and 33 new lows.