U.S. stocks ended sharply lower on Thursday in a volatile trading session that was marked by a rally and a selloff as investors weighed Fed’s plans of multiple interest rates hikes this year while at the same time juggled positive economic data and mixed corporate earnings. All the three major indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell less than 0.1% or 7.31 points to close at 34,160.78 points. The blue-chip index at one point of the trading session gained 600 points but gave up almost all of it.
The S&P 500 lost 0.5% or 23.42 points to close at 4,326.51 points and narrowly avoided entering correction territory. Real estate and consumer discretionary stocks were the worst performers.
The Real Estate Select Sector SPDR (XLRE) declined 1.8%, while the Consumer Discretionary Select Sector SPDR (XLY) lost 2.4%. Five of the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq closed down 1.4% or 189.34 points to finish at 13,352.78 points after trading in positive territory earlier in the session. Shares of Netflix, Inc. NFLX gained 7.5%, while salesforce.com, inc. CRM rose 0.8%. Salesforce has a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The fear-gauge CBOE Volatility Index (VIX) was up 1.19% to 18.65. A total of 13.29 billion shares were traded on Thursday, higher than the last 20-session average of 11.56 billion. Decliners outnumbered advancers on the NYSE by a 2.65-to-1 ratio. On Nasdaq, a 3.71-to-1 ratio favored declining issues.
Rising Rate Worries Take a Toll on Markets
Markets gave up gains on Wednesday after Fed Chair Jerome Powell hinted that central bank would go for multiple rate hikes that is likely to start as early as March. The worries kept denting investors’ confidence, which continued to take a toll on stocks on Thursday also.
Thursday saw a volatile trading session that saw all the three indexes recording huge gains earlier on but as worries of interest rate hikes continued to build pressure on stocks, all swung back into negative territory.
This also saw the S&P 500 barely managing to close above the correction mark of 4,316.905, a 10% decline from its recent record close. Investors also digested a set of mixed corporate results which also somewhat weighed heavy on stocks. Although some impressive economic data lifted investors sentiments for a while, it didn’t help much in turning the indexes into green.
All the three indexes are now down for the week. The pullback now has the Dow and S&P 500 on track for their worst monthly performance since 2020, while the Nasdaq is inkling closer to record its worst month since October 2008.
Thursday saw some impressive economic data but that couldn’t lift investors’ sentiment much. The Commerce Department said that the gross domestic product in the fourth quarter grew a healthy 6.9%, surpassing economists’ expectations of 5.5%.
The National Association of Realtors said on Thursday that pending home sales declined 3.8% in December. Also, durable goods orders 0.9% in December, which was higher than expectations.
The Labor Department said on Thursday that initial jobless claims declined to 260,000, declining 30,000 for the week ending Jan 22. The four-week moving average also rose to 247,000, an increase of 15,000 from the previous week’s revised average of 232,000.
However, continuing claims increased by 51,000 to 1,675,000. The previous week's numbers were revised down by 11,000 from 1,635,000 to 1,624,000. The 4-week moving average came in at 1,651,750, a decline of 10,750 from the previous week's revised average.
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