U.S. stock market indexes were mixed on Thursday, with investors taking a breather after another strong session on Wednesday while awaiting the crucial jobs report on Friday.
In particular the industrial index Dow Jones moved with losses of 85.68 points or 0.26% to 32,726.82 points, the broadest S&P 500 fell 3.74 points or 0.09% to 4,151.43, while the tech Nasdaq managed to remain in positive territory, with gains of 52.42 points or 0.41%, to 12,720.58 points.
Friday’s labor market report is expected to show whether the strong US labor market, which has largely offset recessionary fears, maintained its momentum in June.
The president of the Cleveland Federal Reserve said on Thursday that the central bank should continue to raise interest rates until high U.S. inflation begins to show signs of abating, joining a group of senior U.S. central bank officials backing more hawkish moves in the field of monetary policy.
“We are committed to reducing inflation,” noted Loretta Mester at an Economic Club of Pittsburgh event. He added that he would need to see several months of sustained price deflation before he is convinced that the Fed’s efforts are working.
Although the economy is slowing, Mester insisted that the US is not in recession, despite two consecutive quarters of year-over-year contraction in the country’s GDP.
“We are not in a recession right now. Have the risks of a recession increased? Yes,” he said.
As Barclays analysts commented, “US-China tension remains and the Fed continues to talk aggressively about inflation, but corporate earnings were enough to catalyze the next step in the market’s recovery.”
“A wave of better-than-estimated tech results along with the broader industry complex drove the S&P 500 to a new current-quarter high,” they added.
Investors are also looking ahead to July US inflation data due next week.
“I would call today one of those ‘wait and see’ days because of the wait for the most important item to come this week,” said Art Hogan, chief market strategist at B. Riley Financial.
Shares in Eli Lilly fell, with the company reporting earnings that fell short of analysts’ estimates and cutting its full-year guidance.
Among the 30 Dow stocks, 9 moved with a positive sign and 21 with a negative sign. The gains were led by those of 3M, Visa, American Expresswhile the losses of Walmart, Chevron, Verizon.
New eight-month high in jobless claims
In macro news for the day, new jobless claims continued to move higher, hitting a new eight-month high, but remain at a manageable number.
Initial claims for jobless benefits rose by 6,000 to a seasonally adjusted 260,000 for the week ended July 30, the Labor Department said.
Meanwhile, the US trade deficit narrowed significantly in June as exports soared to a new record, data from the US Commerce Department showed today.
Specifically, the trade deficit fell 6.2% to $79.6 billion. Exports of goods and services rose 1.7% to a record high of $260.8 billion, while imports fell 0.3% to 340, 4 billion dollars
Source: Capital
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