The major stock market indexes gave back Wednesday's gains and sliced through midyear lows on Thursday afternoon, trading near lows of the day. The Nasdaq got hit hard on fears of more aggressive Fed action in response to the sudden drop in unemployment claims.
The Nasdaq composite fell 3.8% into the final hour, while the S&P 500 has lost 2.8%. The Dow Jones is holding better, dropping 2.2%. The Russell 2000 small-cap index is getting sold aggressively, down 3%.
Economic Data Drives Stock Market Losses
Volume on the NYSE and the Nasdaq was lower vs. the same time on Wednesday.
The Nasdaq 100-tracking Invesco QQQ Trust retreated 3.6%. The yield on the 10-year U.S. Treasury rose to 3.75%.
European markets also felt pain, with the German DAX stock index down 1.7%, Paris CAC 40 down 1.5% and London FTSE 100 down 1.8% to close out the trading day.
Initial jobless claims for the week ending Sept. 24 were 193,000 vs. the 218,000 consensus, a surprise decrease over the prior week's 213,000. The market sees this as a sign of continued labor market strength, pushing the Fed to further rate hikes that could trigger a recession.
The third Q2 GDP estimate matched expectations at -0.6%. The personal consumption expenditures annual rate increased by 2.0%, showing continued strength in consumer spending. The personal consumption number includes durable goods, including autos and appliances, as well as non-durable goods like clothing and food.
Crude oil lost 0.9% to $81.40 per barrel. The SPDR Select Energy ETF trimmed 0.7%.
Bitcoin dipped 1.1% to $19,355.
Stock Market Gainers And Losers: Home Equipment Stock Sinks
Peloton sold off 16.3% as investors punished discretionary stocks on fears of economic woes. The stock dropped despite news that it would sell its bikes and treadmills though Dick's Sporting Goods via their physical and online stores. Shares of Dick's fell 2.9%.
Security and cloud company DXC Technology led the S&P 500, gaining 3.2% and setting off a temporary trading halt on a rumored takeover.
CarMax plummeted 24% after reporting a miss on fiscal Q2 2023 sales and a big decrease in EPS from the prior year. The sell-off is the largest decline since March 2020, when it fell 20.6%.
This mammoth drop makes KMX stock today's worst performer in the S&P 500 Index. CarMax is now almost 60% below its 52-week high.
Rite Aid plunged 27% after reporting a miss on its fiscal Q2 2023 EPS and lowering its full-year adjusted EBITDA guidance.
Futures Rise Even As Dow Giant Plunges
IBD 50; Buffett's Buys; Cybersecurity Gives Back Gains
Occidental Petroleum rose early but has pulled back to a 0.2% gain. Shares popped on news that Warren Buffett's Berkshire Hathaway added about 6 million shares between Monday and Wednesday. This brings its total stake to 20.9%.
OXY stock is seeing a 66.26 buy point of a recent cup-with-handle base and an rising relative strength line.
Cloud-based cybersecurity company KnowBe4 gave back morning gains, now down 0.7%, and is finding support at the 21-day exponential moving average. The IBD 50 component broke out on Sept. 19 in heavy volume, following news it received a $24-per-share buyout offer from Vista Equity Partners. The stock has a high 90 Relative Strength Rating.
ON Semiconductor was an IBD 50 loser, dropping 5.1% as the tech sector saw weakness from higher yields and worries about further rate hikes.
It was also a bad day for market-leading solar stocks. Array Technologies sold off 7.6% while Daqo New Energy tumbled 6.3%.
