Stock market indexes were off session lows in afternoon trading Thursday, but remained broadly down. The government's jobless claims data showed a firm labor market as investors geared up for the all-important monthly employment report Friday.
The Nasdaq composite fell 0.8% but stayed above the 13,000 level. The S&P 500 fell 0.7% and held above its 200-day moving average. The Dow Jones Industrial Average grew its loss to 0.5%. A day after a promising upside reversal, the small-cap Russell 2000 was down 0.6%.
Volume fell on the New York Stock Exchange and Nasdaq compared with the same time on Wednesday. Decliners outnumbered advancers by nearly 2-to-1 on the NYSE and by 7-to-5 on the Nasdaq.
The Innovator IBD 50 ETF was down 0.3%. IBD 50 stocks Futu and Atlassian are sinking deeper below their 50-day moving averages.
Stock Market: Jobless Claims Lower Than Expected
Earlier Thursday, first-time claims for unemployment benefits climbed by 2,000 last week to 207,000, the Labor Department said. Economists called for 210,000 in first-time claims, according to Econoday.
"In the near term, long-term interest rates could continue to move higher; momentum is a powerful force in capital markets," noted Bill Adams, chief economist for Comerica Bank. "But trees don't grow to the sky. Higher long-term rates also mean the Fed has to do less lifting to keep financial conditions restrictive, and will impose new headwinds on housing prices, which have been an important source of higher trend inflation since the pandemic."
On net the increase in long Treasury yields makes the Fed more likely to choose an earlier peak in short-term interest rates and an earlier pivot to rate cuts in 2024.
The yield on the 10-year Treasury note jumped to 4.77% after the release, but backed off to 4.71% in afternoon trading.
The Energy Select Sector SPDR exchange traded fund fell 1% and is at the 200-day moving average. It's an important test for the energy ETF, as the price of crude oil cools off. In afternoon trading, U.S. crude fell 1.5% to $82.95 a barrel.
Rivian Skids, Tesla Adds To Charging Network
Rivian Automotive was down 19% in Thursday afternoon's stock market after the electric-vehicle company said late Wednesday it will offer $1.5 billion of convertible debt. It also announced preliminary revenue that was in line with views. Thursday's losses wiped out all of Wednesday's 9.2% rally and then some.
The tumble took Rivian shares to a three-month low.
Also in the EV industry, Tesla reversed lower 1%. South Korea-based Hyundai Motor announced Thursday it will adopt the North American Charging Standard. That means Hyundai vehicles in the North American market will have access to the plug used in Tesla's EV charging network.
Constellation Brands beat quarterly estimates and raised its outlook. Yet the stock lost more than 3% in heavy volume. A 14% drop in wines and spirits sales appeared to hit shares, which are nearing the 200-day line.
The company's Modelo Especial beer continued to gain market share, having already toppled Bud Light as the nation's No. 1 beer brand.
Clorox plunged more than 7%, at one point hitting its lowest level since May 2018. The bleach maker warned late Wednesday that a cybersecurity attack over the summer will hurt results, and it cut its forecast for the September-ended quarter.
A few analysts cut their price targets on Clorox, which is the worst performer today in the S&P 500. And Raymond James downgraded the stock to market perform from outperform.
Exxon Mobil Suffers Sell Signal
Exxon Mobil fell 2.1% and is now down 8% from a 118.84 handle buy point. That marks a sell signal. The oil and gas company said in a filing that rising crude prices are likely to lift its third-quarter profit by about $1 billion. But thinning margins in its chemicals business are expected to cut $400 million to $600 million from those gains.
Lamb Weston jumped more than 9% after earnings for its August-ended quarter beat estimates. Higher prices for the maker of frozen potato products helped its bottom line. The company raised its profit forecast for the full year, citing "current solid demand and pricing environment."
The stock gapped up above its still-falling 50-day moving average. It is Thursday's best-performing stock in the S&P 500, according to FactSet.
Stock Market Looks To Jobs Report
Friday before the stock market opens, the Labor Department will release its employment report for September. A surprise could rattle stocks or spark gains. Economists expect 160,000 new jobs, with the unemployment rate dipping to 3.7% and wage growth steady at 4.3%.
The jobs report will come as the 10-year Treasury yield jumped to a 16-year high this week. The surging cost of borrowing has hurt stocks. Since the 10-year yield began its latest leg up, the Nasdaq is down nearly 6% and the Russell 2000 has lost almost 9%.
