U.S. Stocks Close Narrowly Mixed Following Choppy Trading Day

After pulling back sharply over the course of the two previous sessions, stocks showed a lack of direction throughout the trading day on Thursday. The major averages bounced back and forth across the unchanged line before ending the day mixed.

While the Dow edged down 66.57 points or 0.2 percent to 34,894.12, the Nasdaq inched up 15.87 points or 0.1 percent to 14,541.79 and the S&P 500 crept up 5.53 points or 0.1 percent to 4,405.80.

The choppy trading on Wall Street came as traders expressed some uncertainty about the near-term outlook for the markets after initial weakness dragged the major averages down to their lowest intraday levels in almost a month.

The initial move to the downside came as traders continued to digest the minutes of the Federal Reserve’s latest monetary policy meeting.

The minutes indicated that most Fed officials currently expect economic conditions to warrant scaling back the central bank’s asset purchase program before the end of the year.

The Fed restarted its asset purchase program back in March of 2020 and is currently purchasing bonds at a pace of $120 billion per month.

The asset purchase program has helped to prop up the markets throughout much of the coronavirus pandemic, with stocks reaching record highs even as the economy struggled.

However, the minutes showed there was still some disagreement about the timing of tapering the asset purchases, leading to some uncertainty on Wall Street.

Potentially adding evidence to Fed officials’ view that the economy is close to the goal of maximum employment, the Labor Department released a report this morning showing initial jobless claims fell to a new pandemic-era low in the week ended August 14th.

The Labor Department said initial jobless claims fell to 348,000, a decrease of 29,000 from the previous week’s revised level or 377,000.

Economists had expected jobless claims to edge down to 363,000 from the 375,000 originally reported for the previous week.

Initial jobless claims decreased for the fourth consecutive week, falling to their lowest level since hitting 256,000 in the week ended March 14, 2020.

Sector News

Despite the lackluster performance by the broader markets, steel stocks moved sharply lower on the day, dragging the NYSE Arca Steel Index down by 4.2 percent to its lowest closing level in a month.

Substantial weakness also remains visible among energy stocks, which plunged along with the price of crude oil. Crude for September delivery tumbled $1.77 to $63.69 a barrel.

Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index and the NYSE Arca Oil Index plummeted by 3.2 percent and 2.7 percent, respectively.

Airline stocks also showed a significant move to the downside on the day, resulting in a 2.3 percent nosedive by the NYSE Arca Airline Index. The index ended the session at a six-month closing low.

Gold, biotechnology and computer hardware stocks also saw considerable weakness, while notable strength was visible among software stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index slumped by 1.1 percent, while Hong Kong’s Hang Seng Index plunged by 2.1 percent.

The major European markets also showed significant moves to the downside on the day. While the French CAC 40 Index plummeted by 2.4 percent, the U.K.’s FTSE 100 Index and the German DAX Index tumbled by 1.5 percent and 1.3 percent, respectively.

In the bond market, treasuries moved higher early in the session and remained firmly positive. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.1 basis points to 1.242 percent.

Looking Ahead

Following the slew of economic news over the past few days, the economic calendar is quiet on Friday, potentially leading to a light trading day.

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