US close: Shares mixed as inflation worries kick in
Rising US bond yields prompted by concerns over inflationary pressures kept the lid on shares on Thursday.
The Dow Jones Industrial Average rose 37.32 points, or 0.14%, to close at 26,186, while the S&P 500 fell 1.83 points to 2,821 and the Nasdaq was 25.62 points lower to 7,385.
The benchmark 10 year Treasury bond yield rose to 2.78% as worries over inflation increased after the Fed said it expected prices to rise this year, effectively preparing the ground for an interest rate rise next month.
Investors were also wary ahead of the jobs report on Friday, looking for any sign of the unemployment rate falling below 4% and rising wages, both of which could lead to higher prices.
Investors did find some cheer in economic data as figures from the Labor Department showed the number of Americans filing for unemployment benefits fell last week. US initial jobless claims declined by 1,000 to 230,000 from the previous week’s level, which was revised down from 233,000. Economists had been expecting a jump to 238,000.
The four-week moving average came in at 234,500, down 5,000 from the previous week’s average, which was revised down by 500.
Meanwhile, Markit’s manufacturing purchasing managers’ index came in at 55.5 in January, unchanged from the previous month and ahead of expectations for a drop to 54.9.
The Institute for Supply Management’s manufacturing index fell to 59.1 from 59.3 in December, but was ahead of expectations for a reading of 58.6.
Capital Economics said: "The small decline in the ISM manufacturing index in January still left the index well above historical averages and consistent with GDP growth of over 4% annualised. With domestic demand receiving a boost from tax cuts and external demand buoyed by strong growth overseas and a depreciating dollar, prospects for the manufacturing sector in 2018 look bright."
Figures on construction spending also beat estimates. According to the Commerce Department, spending was up 0.7% to an all-time high of $1.25trn in December, versus expectations for a 0.4% increase.
There was no shortage of corporate news for investors to sink their teeth into either, with some heavyweight firms reporting.
Shares in Amazon bounced into the black surged in after-hours trade as the company's fourth quarter results beat expectations, with net income up to $1.86 bn, or $3.75 a share, from $749m, or $1.54 a share year-on-year.
Recent US tax cuts provided a one-off benefit of $789m.
Alphabet shares took a tumble after the bell as the company missed fourth quarter earnings estimates. The company reported fourth-quarter losses of $3.02bnbn a year earlier.
It also revealed that its effective tax rate soared to 138% from 22% as it booked a tax expense of $9.9bn due to tax code changes in tax code. Revenue beat forecasts, rising to $32.32bn from $26.06bn.
Ebay surged following better-than-expected quarterly earnings late on Wednesday and after the company said it plans to take over payment-processing duties from PayPal. Shares in PayPal tumbled on the news, however.
Elsewhere, social media group Facebook was also in the black after solid fourth-quarter results, while shares in software company Microsoft were up after its quarterly earnings late on Wednesday surpassed expectations.
Time Warner advanced after reporting a 9% increase in fourth-quarter revenue, while Mastercard rose after its fourth-quarter profit and revenue exceeded analysts’ expectations.
Alibaba fell after its quarterly revenue beat expectations but earnings fell short, while medical device maker Boston Scientific and DowDuPont also declined after quarterly updates.
Ralph Lauren shares were weaker after the company's sales fell more than expected in the third quarter.
Dow Jones - Risers
Exxon Mobil Corp. (XOM) $88.86 1.79%
Walt Disney Co. (DIS) $110.45 1.64%
Goldman Sachs Group Inc. (GS) $271.13 1.21%
Johnson & Johnson (JNJ) $139.38 0.86%
JP Morgan Chase & Co. (JPM) $116.35 0.58%
Boeing Co. (BA) $355.82 0.41%
Visa Inc. (V) $124.69 0.37%
McDonald's Corp. (MCD) $171.77 0.37%
American Express Co. (AXP) $99.77 0.36%
Verizon Communications Inc. (VZ) $54.22 0.28%
Dow Jones - Fallers
Dowdupont Inc. (DWDP) $73.48 -2.78%
Microsoft Corp. (MSFT) $93.68 -1.41%
3M Co. (MMM) $247.12 -1.35%
Intel Corp. (INTC) $47.53 -1.28%
General Electric Co. (GE) $15.98 -1.14%
Nike Inc. (NKE) $67.46 -1.11%
Walmart Inc. (WMT) $105.45 -1.08%
International Business Machines Corp. (IBM) $161.99 -1.04%
Pfizer Inc. (PFE) $36.74 -0.80%
Unitedhealth Group Inc. (UNH) $234.91 -0.79%
S&P 500 - Risers
Qorvo, Inc. (QRVO) $82.90 15.51%
eBay Inc. (EBAY) $46.14 13.70%
Skyworks Solutions Inc. (SWKS) $103.00 5.96%
AT&T Inc. (T) $39.10 4.42%
Eaton Corporation plc (ETN) $87.50 4.20%
AbbVie Inc (ABBV) $116.32 3.66%
Mondelez International Inc. (MDLZ) $45.87 3.31%
Facebook Inc. (FB) $193.01 3.28%
Newell Brands Inc (NWL) $27.27 3.14%
Lincoln National Corp. (LNC) $85.38 3.12%
S&P 500 - Fallers
Tractor Supply Company (TSCO) $70.09 -8.08%
Paypal Holdings Inc (PYPL) $78.61 -7.86%
United Parcel Service Inc. (UPS) $118.82 -6.68%
Hershey Foods Corp. (HSY) $103.35 -6.33%
Regeneron Pharmaceuticals Inc. (REGN) $345.61 -5.74%
Eversource Energy (ES) $59.89 -5.07%
Altaba Inc. (AABA) $75.95 -4.92%
SCANA Corp. (SCG) $38.86 -4.40%
Parker-Hannifin Corp. (PH) $193.01 -4.18%
Xerox Corp. (XRX) $32.74 -4.09%
Nasdaq 100 - Risers
eBay Inc. (EBAY) $46.14 13.70%
Skyworks Solutions Inc. (SWKS) $103.00 5.96%
Idexx Laboratories Inc. (IDXX) $193.29 3.34%
Mondelez International Inc. (MDLZ) $45.87 3.31%
Facebook Inc. (FB) $193.01 3.28%
Biomarin Pharmaceutical Inc. (BMRN) $92.69 2.73%
Wynn Resorts Ltd. (WYNN) $169.97 2.65%
Shire Plc Ads (SHPG) $142.09 1.46%
Hasbro Inc (HAS) $95.66 1.15%
Ctrip.Com International Ltd. Ads (CTRP) $47.26 1.02%
Nasdaq 100 - Fallers
Paypal Holdings Inc (PYPL) $78.61 -7.86%
Cadence Design Systems Inc. (CDNS) $42.00 -6.38%
Regeneron Pharmaceuticals Inc. (REGN) $345.61 -5.74%
Vodafone Group Plc ADS (VOD) $30.77 -4.48%
Broadcom Limited (AVGO) $238.20 -3.96%
JD.com, Inc. (JD) $47.41 -3.70%
Amazon.Com Inc. (AMZN) $1,400.19 -3.49%
Micron Technology Inc. (MU) $42.26 -3.34%
Automatic Data Processing Inc. (ADP) $119.69 -3.19%
Baidu Inc. (BIDU) $239.56 -2.98%