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Wall Street’s major averages on Thursday ended marginally lower, having erased a chunk of their losses towards the end of the trading session.
Investors were looking ahead to Friday’s non-farm payrolls report, after a week that has seen mixed economic data on the labor market, further clouding the picture for the Federal Reserve’s future monetary policy actions.
The tech-heavy Nasdaq Composite (COMP.IND) closed 0.12% lower at 13,219.83 points, paring back from a fall of as much as 1%. The benchmark S&P 500 (SP500) slipped 0.13% to settle at 4,258.18 points, while the blue-chip Dow (DJI) retreated 0.03% to finish at 33,119.57 points.
Of the 11 S&P sectors, seven ended in negative territory, led by Consumer Staples. Defensive sectors Real Estate and Health Care topped the four gainers. Energy declined ~0.6% as WTI crude oil futures (CL1:COM) slid about 2.3%, a day after falling to four-week lows.
“(The) underlying picture is worse than the S&P 500 (SP500) may suggest,” Leo Nelissen, part of investing group iREIT on Alpha, told Seeking Alpha. “For example, we’re seeing ongoing carnage in cyclical investments. Even defensive investments like PepsiCo (PEP) and Coca-Cola (KO) are being punished as the market (and analysts) expect consumer staples to run into even more demand headwinds.”
Earlier in the day, the number of Americans filing for initial jobless claims in the past week rose to 207K, below the consensus figure of 210K. The report came after Tuesday’s hotter-than-anticipated JOLTS data and Wednesday’s cooler-than-expected ADP data. The contrasting signals about the resilience in the labor market weighed on sentiment through the first half of trading today.
Thursday’s economic calendar also had trade in goods and services data on the docket. The deficit for August narrowed more than expected.
Meanwhile, calm sustained in the fixed-income markets for a second straight day, with Treasury yields slightly lower. After coming within 2 basis points of 4.90% early on Wednesday, the longer-end 10-year yield (US10Y) continued its retreat with a decline of 2 basis points to 4.72%. The more rate-sensitive 2-year yield (US2Y) was down 3 basis points to 5.02%.
See how Treasury yields have done across the curve at the Seeking Alpha bond page.
The recent bruising bond rout has weighed on equities, threatened hopes for a soft landing for the U.S. economy and has also sparked concerns about recession.
“In general, if the past few days have taught us anything, it’s that a hard landing seems unavoidable. Rates are elevated, growth is declining, and Washington D.C. is far from stable. While it’s hard to make the case that stagflation is imminent, market participants are starting to price in what could be a very bumpy road to lower lows in the weeks and maybe even months ahead,” iREIT on Alpha’s Nelissen added.
Turning to active stock movers, Lamb Weston (LW) ended as the top percentage gainer on the S&P 500 (SP500) after the frozen potato giant delivered a beat-and-raise quarter.