US close: Stocks weaker as Bullard hints at rates above 5pc
Wall Street stocks finished weaker on Thursday, as market participants digested several data points and comments from an array of Federal Reserve bankers.
At the close, the Dow Jones Industrial Average was off 0.02% at 33,546.32, as the S&P 500 lost 0.31% to 3,946.56 and the Nasdaq Composite was 0.35% lower at 11,144.96.
The Dow closed 7.51 points lower on Thursday, adding to the losses it recorded on Wednesday following sour earnings from retail giant Target.
Thursday's focus was on a number of Fed speakers, with Raphael Bostic, Michelle Bowman, Loretta Mester, Philip Jefferson, and Neel Kashkari all delivering speeches through the course of the day.
St. Louis Fed president James Bullard also made a hawkish speech, telling an audience in Louisville, Kentucky that the central bank’s interest rate target would need to be raised further to bring inflation down.
“The change in the monetary policy stance appears to have had only limited effects on observed inflation, but market pricing suggests disinflation is expected in 2023,” he said.
His speech was accompanied by a chart which apparently suggested he saw rates in the 5% to 7% range as a possibility.
“US markets opened sharply lower after St. Louis Fed president James Bullard said that the central bank needed to go much further in raising rates, saying that to really get handle on inflation the terminal rate had to rise to between 5% and 7%,” said CMC Markets chief market analyst Michael Hewson earlier.
“This is much higher than the current target level for markets of 3.75% to 4%.
“Unsurprisingly the Nasdaq 100 has led the losses while yields have also shot higher, with the US two-year and 10-year yield both reversing from six-week lows.”
On the economic front, unemployment claims slipped just a tad last week but some economists said that the underlying trend might now be edging up.
According to the Department of Labor, first-time jobless claims decreased by 4,000 to reach 222,000 during the week ended 12 November.
The four-week moving average for initial claims increased by 2,000 to 221,000.
Elsewhere, homebuilders in the US broke ground on slightly more new houses last month than forecast by economists.
According to the Department of Commerce, in seasonally adjusted terms, the annual rate of housing starts declined at a month-on-month pace of 4.2% to reach 1.425m.
Housing permits, on the other hand, decreased by 2.6% month-on-month to reach 1.52m.
Finally, manufacturing sector activity in the US mid-Atlantic region worsened unexpectedly last month as factories reduced staffing levels and the work week shortened.
According to the Federal Reserve Bank of Philadelphia, its regional factory gauge dropped from a reading of -8.7 for September to -19.4 in October.
In equities, department store chain Macy's rocketed 15.02% after it raised its full-year earnings guidance on the back of third-quarter results ahead of Wall Street expectations.
Suburban department store specialist Kohl's was also in the green, rising 5.44% after it beat expectations on third-quarter revenue and profit, but withdrew full-year guidance amid "significant" macroeconomic challenges.
On the downside, chipmaker Nvidia was 1.46% weaker after its third-quarter net income slid to $680m from $2.46bn year-on-year, although it did report progress in assisting its customers with reducing inventories.
Reporting by Josh White for Sharecast.com. Additional reporting by Iain Gilbert.
Dow Jones - Risers
Cisco Systems Inc. (CSCO) $46.59 4.96%
Merck & Co. Inc. (MRK) $102.31 2.38%
Apple Inc. (AAPL) $150.72 1.30%
Amgen Inc. (AMGN) $287.30 1.24%
Intel Corp. (INTC) $29.89 1.22%
International Business Machines Corporation (CDI) (IBM) $146.09 1.09%
Travelers Company Inc. (TRV) $182.97 0.99%
Johnson & Johnson (JNJ) $174.98 0.81%
Unitedhealth Group Inc. (UNH) $515.31 0.74%
Verizon Communications Inc. (VZ) $38.17 0.74%
Dow Jones - Fallers
Salesforce.Com Inc. (CRM) $149.69 -3.50%
Walt Disney Co. (DIS) $91.45 -2.66%
American Express Co. (AXP) $150.64 -1.26%
3M Co. (MMM) $127.15 -1.24%
Home Depot Inc. (HD) $311.44 -1.10%
Caterpillar Inc. (CAT) $230.44 -0.85%
Dow Chemical Co. (DOW) $50.13 -0.75%
Goldman Sachs Group Inc. (GS) $379.78 -0.67%
Walgreens Boots Alliance, Inc. (WBA) $40.13 -0.64%
Procter & Gamble Co. (PG) $140.87 -0.61%
S&P 500 - Risers
Bath & Body Works, Inc. (BBWI) $38.97 24.39%
Macy's Inc. (M) $22.67 15.02%
Nordstrom Inc. (JWN) $21.09 5.82%
Gap Inc. (GPS) $12.71 5.56%
Kohls Corp. (KSS) $31.42 5.44%
Qorvo, Inc. (QRVO) $97.66 5.20%
Foot Locker Inc. (FL) $33.00 5.00%
Cisco Systems Inc. (CSCO) $46.59 4.96%
Hasbro Inc (HAS) $58.42 4.38%
Target Corp. (TGT) $162.01 4.21%
S&P 500 - Fallers
Norwegian Cruise Line Holdings Ltd (NCLH) $16.40 -6.77%
IQVIA Holdings Inc. (IQV) $211.42 -5.62%
State Street Corp. (STT) $74.51 -5.58%
Svb Financial Group (SIVB) $222.62 -5.29%
Advance Auto Parts (AAP) $148.31 -5.08%
Laboratory Corporation of America Holdings (LH) $233.10 -4.44%
Hanesbrands Inc. (HBI) $7.00 -4.24%
Royal Caribbean Cr (RCL) $57.81 -3.87%
NRG Energy Inc. (NRG) $41.35 -3.77%
Idexx Laboratories Inc. (IDXX) $410.44 -3.67%
Nasdaq 100 - Risers
JD.com, Inc. (JD) $57.52 7.53%
Baidu Inc. (BIDU) $99.58 5.10%
Cisco Systems Inc. (CSCO) $46.59 4.96%
Hasbro Inc (HAS) $58.42 4.38%
Asml Holdings N.V. (ASML) $589.03 2.14%
T-Mobile Us, Inc. (TMUS) $147.77 1.99%
Biomarin Pharmaceutical Inc. (BMRN) $87.43 1.85%
QUALCOMM Inc. (QCOM) $122.86 1.76%
Incyte Corp. (INCY) $77.92 1.58%
KLA-Tencor Corp. (KLAC) $375.99 1.50%
Nasdaq 100 - Fallers
Mercadolibre Inc. (MELI) $927.13 -4.70%
Workday, Inc. (WDAY) $148.81 -4.23%
Idexx Laboratories Inc. (IDXX) $410.44 -3.67%
Booking Holdings Inc. (BKNG) $1,940.76 -3.63%
Netflix Inc. (NFLX) $295.28 -3.51%
Qurate Retail Inc. (QRTEA) $2.07 -3.27%
Align Technology Inc. (ALGN) $194.96 -3.19%
Illumina Inc. (ILMN) $224.68 -3.07%
Intuit Inc. (INTU) $381.88 -2.99%
Autodesk Inc. (ADSK) $214.68 -2.92%