The U.S. stock market is seeing a session marked by losses and increased volatility Thursday, with the S&P 500 index poised to close in the red for the third consecutive day.
It's an occurrence not seen since March, when Silicon Valley Bank and other smaller banks failed. Investors' biggest concern remains the health of the financial sector, with bank stocks among the session's worst performers.
The VIX fear index was up 15% today, while gold, another indicator of financial distrust, reached a new all-time high of $2,080 per ounce.
After the markets close, all eyes will be on Apple, Inc.’s AAPL earnings report.
Cues From Thursday’s Trading:
The S&P 500 index was down 0.9% as of midday trading in New York, while blue-chip stocks in the Dow Jones Industrial Average fell 1.2%. The tech-heavy Nasdaq 100 fell 0.3%, dropping below 13,000 levels.
Small-cap stocks were hit the hardest, with the Russell 2000 index losing 1.7%.
| Index | Performance (+/-) | Value | |
|---|---|---|---|
| Nasdaq 100 | -0.26% | 12,986.33 | |
| S&P 500 Index | -0.90% | 4,057.15 | |
| Dow Industrials | -1.19% | 33,019.14 |
Analyst Color:
Bank of America's U.S. economist Michael Gapen estimates the Fed has achieved its peak in this tightening cycle, despite the fact that two jobs reports and CPI inflation readings are due before the June FOMC meeting.
Thursday's Trading In Major US Equity ETFs: In midday trading on Thursday, the SPDR S&P 500 ETF Trust SPY was 0.7% lower to $405.33, the SPDR Dow Jones Industrial Average ETF DIA feel 1.1% to $330.54 and the Invesco QQQ Trust QQQ was 0.2% down to $316.54, according to Benzinga Pro data.
Nine out of elevel S&P 500 sectors posted losses for the day, with cyclical sectors underperforming. The Financial Select Sector SPDR Fund XLF was the loser, down 1.5%, followed by the Communication Services Select Sector SPDR Fund XLC, down 1.1%, the Industrials Select Sector SPDR Fund XLI, down 1.1% and the Energy Select Sector SPDR Fund XLK, down 0.9%.
The Utilities Select Sector SPDR Fund XLU and the Real Estate Select Sector SPDR Fund XLRE, were the only two sectors in the green, up 0.9% and 1%, respectively.
Latest Economic Data:
The U.S. Bureau of Labor Statistics reported that weekly jobless claims rose by 13,000 to 242,000 in the week ended April 29. Analysts were expecting an increase of 10,000 to 240,000.
According to preliminary data from the U.S. Bureau of Labor Statistics, unit labor costs in the U.S. nonfarm business sector climbed an annualized 6.3% in Q1 2023, accelerating from an upwardly revised 3.3% increase in the previous period and above market forecasts of a 5.5% gain.
Non-farm labor productivity dropped 2.7% in Q1, down from a revised 1.6% gain in the previous period and worse than market expectations of a 1.8% drop.
According to the Bureau of Economic Analysis, the U.S. trade deficit shrank to a four-month low of $64.2 billion in March 2023, down from $70.6 billion in February, contrary to market expectations of a $63.3-billion gap.
The Federal Reserve will release data on its balance sheet and reserve balances with Federal Reserve Banks at 4:30 p.m. EDT.
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Stocks In Focus:
MetLife, Inc. MET plummeted 9% after reporting weaker-than-expected results in Q1.
Paramount Global PARA nosedived over 25% after its financial results disappointed expectations last quarter.
Comerica Inc. CMA fell roughly 8% amid greater uncertainty in small and medium-sized banking institutions.
Ball Corporation BALL rose about 15% following the release of better-than-expected first-quarter results.
- Lemonade, Inc. LMND rose about 25% following stronger-than-expected earnings last quarter.
- Qualcomm, Inc. QCOM slipped about 6% in reaction to its earnings.
- PacWest Bancorp. PACW tumbled about 44% after rumors about exploring strategic options and the company’s clarification in this regard. Regional banking peers Western Alliance Bancorp. WAL and First Horizon Corp. FHN declined about 30% and 35%, respectively.
- Ferrari N.V. RACE rose 5.5% after reporting better-than-expected results last quarter.
- Shopify, Inc. SHOP rose 25% after better-than-expected Q1 results.
- Royal Caribbean Cruises Ltd. RCL rose 7.4% after posting weaker-than-expected losses in Q1.
- Apple, Coinbase Global Inc. COIN, DraftsKing, Inc. DKNG, Lyft, Inc. LYFT and DoorDash, Inc. DASH are among the key companies reporting after the market close.
Commodities, Bonds, Other Global Equity Markets:
Crude oil ticked 0.8% higher, with a barrel of WTI-grade crude dropping to $68.90. The United States Oil Fund ETF USO was 0.8% up to $60.80 per share.
Treasury yields continued to fall, with the 10-year yield down by 2 basis points to 3.32% and the two-year yield up 12 basis points to 3.67%. The iShares 20+ Year Treasury Bond ETF TLT was 0.5% lower on the day.
The dollar was flat, with the U.S. dollar index, which is tracked by the Invesco DB USD Index Bullish Fund ETF UUP, unchanged at 101.27 levels. The EUR/USD pair, which is tracked by the Invesco CurrecyShares Euro Currency Trust FXE, fell 0.3% to 1.1026, after the ECB hiked interest rates.
European equity indices were about to close the session in negative territory. The iShares MSCI Eurozone ETF EZU fell 0.5%.
Gold rose 0.4% to $2,051/oz. The SPDR Gold Trust GLD was 0.8% higher at $190.62. Silver rose 1.5% up to $25.97, with the iShares Silver Trust SLV rising 1.8% to $23.86 per share. Bitcoin BTC/USD eased 0.5% to $28,894.
Staff writer Piero Cingari updated this report midday Thursday.
Photo via Shutterstock.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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