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Market Snapshot: U.S. stocks edge lower as investors await Friday jobs report

U.S. stocks were mostly lower early Thursday as investors assessed weekly jobs data and monitored corporate earnings reports after equities bounced back sharply in the previous session after back-to-back losses.

What’s happening

The Dow Jones Industrial Average

was down 47 points, or 0.1%, at 32,765.

The S&P 500

shed 7 points, or 0.2%, to trade at 4,148.

The Nasdaq Composite

was up 12 points, or 0.1%, at 12,676.

The Dow jumped 416.33 points, or 1.3%, on Wednesday, while the S&P 500 rose 1.6% and the Nasdaq Composite jumped 2.6%.

What’s driving the market

Investors were looking for direction Thursday after stocks bounced back following upbeat U.S. economic data that helped soothe recession fears, though Federal Reserve officials continue to warn that achieving a so-called soft landing for the economy as they raise interest rates to battle inflation will be difficult.

Market participants expect that the prospect of an economic slowdown will lead the Fed to slow interest rate hikes, with fed-funds futures markets pricing in rate cuts in 2023.

“It’s worth noting that stock markets rallied on the signs of stronger-than-expected growth. This is significant because recently they’ve been rallying on signs of weaker growth, which would mean that the Fed was likely to stop hiking rates and start cutting early on,” said Marshall Gittler, head of investment research at BDSwiss Holding Ltd., in a note.

“So stock markets rise when growth looks strong and rise when growth looks weak. Who said markets are consistent?” he wrote.

Another busy day of earnings reports looms. Shares of drug maker Eli Lilly & Co.

fell 2.7% after reporting second-quarter results that came in below Wall Street’s forecast.

In economic data, first-time claims for U.S. jobless benefits rose by 6,000 to 260,000 in the week ended July 30, the Labor Department said Thursday. The July jobs report is due Friday.

Employment gains in July are expected to drop to 258,000 from 372,000 in the prior month, a poll of economists by The Wall Street Journal estimates. If so, it would mark the smallest increase since December 2021.

See: Hiring slowdown? U.S. seen adding just 258,000 jobs in July

“Looking back at July, we started the month with the fear that a lot of bad things could happen—but what we actually saw was a rebound. As we move forward into August, many of those fears appear to already be priced in, while others do not look nearly as bad as they did a couple of months ago,” Brad McMillan, Chief Investment Officer for Commonwealth Financial Network, wrote in a note.

“July’s rebound was the markets taking stock of the fears versus the reality. And while risks remain, it looks like August could provide even more evidence that things are looking up,” he said.

Companies in focus

Shares of Lucid Group Inc. LCID fell 10.5% after the electric-vehicle maker late Wednesday announced a reduction in its production forecast. Lucid said it now expects its 2022 production volume to hit 6,000 to 7,000 vehicles, after stating 12,000 to 14,000 vehicles in May.

Nikola Corp.

shares rose 1.2% after the electric vehicle maker reported a narrower-than-expected loss and revenue that beat forecast, and reiterated its target for Tre BEV truck deliveries.

American depositary receipts of Alibaba Holding Group Ltd.

rose 3.4% after the Chinese e-commerce company topped expectations with its latest financials and indicated that business trends improved as the June quarter wore on.

Hear from Carl Icahn at the Best New Ideas in Money Festival on Sept. 21 and Sept. 22 in New York. The legendary investor will reveal his view on this year’s wild market ride.

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