Stock market indexes rose in mixed trading on Thursday as jobless claims surged and manufacturing data weakened. Earnings reports from Tesla, AT&T, steel and airline stocks dominated the financial chatter.
The Nasdaq composite led the major indexes, gaining 0.7%. The S&P 500 rose 0.4%, and the Dow Jones Industrial Average fell 0.2%. The small-cap Russell 2000 was down 0.4%. The Innovator IBD 50 ETF fell 0.5%.
Volume fell on the Nasdaq and rose on the NYSE, compared to the same time on Wednesday.
Weekly jobless claims rose to 251,000 from 244,000 in the prior week, showing a slightly deteriorating job market. Economists were expecting 240,000.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 31813.10 | -61.74 | -0.19 |
| S&P 500 | (0S&P5) | 3973.41 | +13.51 | +0.34 |
| Nasdaq | (0NDQC ) | 11975.37 | +77.72 | +0.65 |
| Russell 2000 | 180.93 | -0.56 | -0.31 | |
| IBD 50 | 27.23 | -0.11 | -0.40 | |
Last Update: 12:08 PM ET 7/21/2022 |
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The Philadelphia Fed Manufacturing index, an indicator of industrial manufacturing trends, came in with a surprising drop of -12.3. Econoday consensus was looking for an increase of 0.4 for July. This makes two months in a row with a negative report. June's -3.3 was the first negative report since 2008.
Stock Market Falls On Rate Hike Fears
Markets in Europe shifted lower after the European Central Bank raised rates by 50 basis points. Expectations were for a 25-to-50 basis point increase, though bankers had reportedly considered a larger than 50-point hike. The increase is the bank's first in 11 years. The ECB's target deposit rate had been in negative territory since 2014.
European stocks were mixed on the news, with the London FTSE 100 down 0.1%, the German DAX down 0.5% and the French CAC 40 index gaining 0.2%.
In spite of rate increases in Europe, the 10-year Treasury yield fell 10 basis points to 2.93%.
As of Thursday, 73% of polled economists expect a Fed rate hike of 0.75%, compared with 27% odds of a rate hike of 1%, according to the CME Group's FedWatch tool, which tracks interest rate futures.
That means most economists expect the Federal Reserve to raise rates 0.75% when governors meet on July 27 and 28.
Meanwhile, U.S. oil's price fell nearly 2.9% to $97.01 per barrel, the lowest level in more than a week.
Energy stocks were the worst performing sector, with the S&P Energy Select Sector ETF dropping 2.9%.
Tesla, Airlines, AT&T Report Mixed Earnings
Tesla reported better-than-expected second-quarter earnings late Wednesday, even as the electric-vehicle maker dealt with supply shortages and plant closures in Shanghai. Tesla stock gapped up on Thursday. The company announced on July 2 it had delivered 254,695 vehicles in Q2, roughly in line with lowered Wall Street estimates.
United Airlines and American Airlines fell more than 8% after the carriers reported second-quarter earnings below expectations. However, the results signaled confidence that travel demand could withstand an economic slowdown in the months ahead.
United earned $1.43 per share, below estimates for $1.85 per share. The quarter was the first non-GAAP per-share profit for the company since the pandemic began. Revenue of $12.112 billion just missed expectations for $12.123 billion.
American's EPS came in at 68 cents on second-quarter revenue of $13.4 billion. Wall Street expected American Airlines to earn 77 cents per share, up from a loss from a year ago. Similar to United, that was American's first per-share profit since the pandemic. Analysts expected revenue to jump 78% to $13.331 billion.
American's shares fell nearly 8.5% to 13.91, back below their 50-day moving average Thursday. The shares are still significantly below the airline's pre-pandemic levels of 30 or higher.
Steel Stocks Surge On Earnings
Shares of steel companies surged Thursday after several reported earnings beats.
Nucor and Steel Dynamics crushed Q2 earnings estimates, posting record quarterly earnings. While both steelmakers indicated softer results in the quarter ahead, Nucor said it still expects a record profit for the full year, amid resilient demand. NUE shares surged 6.8% Thursday while STLD gained 1.6%.
Alcoa posted a solid beat and set a new $500-million buyback. However, cost issues and supply curbs continue to make for a "volatile year," the aluminum giant said.
AT&T plunged 7.9% after it reported better than expected Q2 results, but lowered its full year free cash flow guidance.
Follow Michael Molinski on Twitter @IMmolinski
