The stock market fell Thursday after unemployment claims rose but not enough to convince investors the Fed will change its aggressive rate policy. Oil giants Chevron and Exxon Mobil led gains while food and beverage companies declined on earnings.
The Nasdaq composite traded 0.1% lower, after initially climbing. The Dow Jones Industrial Average fell 0.3% and the S&P 500 lost 0.2%. The small-cap Russell 2000 index shed 0.3%.
Volume rose on the Nasdaq and fell on the NYSE vs. the same time on Wednesday.
The yield on the 10-year U.S. Treasury note was six basis points higher at 3.82%.
Stock Market Dips On Rising Unemployment Claims
The Labor Department's first-time unemployment claims rose to a five-week high 219,000. Estimates called for a rise to 203,000 from 193,000 in the previous week, according to Econoday.
"The job market is still solid but is softening," said Bill Adams, chief economist for Comerica Bank. "Unemployment insurance claims rose more than expected in the last week of September and it wasn't just Hurricane Ian. On the state level, jobless claims fell 1,400 in Florida, as the hurricane's devastation prevented more claims being filed."
The rise in unemployment claims was not high enough to convince investors the Fed might abandon its rate hike campaign. As of Thursday, 72.8% of investors expected the Fed to raise rates 0.75% at its Nov. 2 meeting, while 27.2% looked for a 0.50% hike, according to the CBOE FedWatch tool.
The pivotal September payroll report is due out Friday morning. Economists predict nonfarm payrolls will rise 250,000 and that unemployment will remain at 3.7%.
U.S. crude oil rose 0.5% to $88.20 per barrel.
The Organization of the Petroleum Exporting Countries, along with Russia, collectively known as OPEC+, agreed on Wednesday to cut oil production by 2 million barrels a day. Oil prices have fallen recently on concerns about a slowing global economy.
The S&P Energy Select Sector ETF rose 1.3%, making it the best-performing component of the 11 S&P sectors. Chevron gained 1.7% while Exxon Mobil was up 1.5%.
XOM is building a new base in a consolidation with a buy point of 105.67. Exxon stock surged Wednesday after it signaled natural gas prices would support already strong third-quarter expectations.
Food And Beverage Stocks Fall Despite Earnings Beat
European markets fell. The London FTSE 100 declined 0.8%, while the German DAX fell 0.4% and the French CAC 40 traded 0.8% lower.
In Asia, Japan's Nikkei 225 gained 0.7%. The Hang Seng lost 0.4% and the Shanghai index fell 0.6%.
Conagra Brands topped earnings and revenue estimates. Shares initially jumped 1.2% but then reversed to trade lower by 2.4% in Thursday's stock market.
The frozen foods company is in consolidation with an official 37.07 buy point, according to MarketSmith. Executives noted that price increases offset inflation woes and supply bottlenecks improved during the first quarter.
"We continued to deliver improved service and productivity as we navigate ongoing inflationary pressures and industrywide supply chain challenges," CEO Sean Connolly said in a news release.
Constellation Brands topped expectations for its second-quarter earnings report. The alcoholic beverage maker is one of America's largest beer suppliers and has posted positive earnings growth the last four quarters. STZ stock fell 1.8% following its results.
Spice maker McCormick gained 1.3% in spite of reporting earnings that missed Wall Street analysts' estimates. Sales were narrowly above estimates.
Market Reverses As Jobs Report Looms; Musk Makes New Twitter Demands
Peleton Jumps After Announcing Plans To Cut Jobs
Peloton Interactive jumped 1.9% after announcing plans to cut about 500 jobs, or roughly 12% of its remaining workforce. Chief Executive Barry McCarthy said the company has six months to prove it can survive on its own. Shares are about 90% off their 52-week high.
Electric-vehicle leader Tesla traded 1.2% lower as Mizuho lowered its price target to $370. Among the Dow Jones industrials, tech titans Apple and Microsoft both traded slightly lower.
The Innovator IBD 50 ETF traded up 0.1%, led by energy stocks Matador Resources, Cenovus Energy and Civitas Resources.
Matador shares rose back above the buy zone from a cup-with-handle base with a buy point of 58.68.
Follow Michael Molinski on Twitter @IMmolinski
