Stocks finished lower Thursday following a record close for the Nasdaq extended the market's solid late-year rally.
The Dow Jones Industrial Average lost 234.44 points, or 0.53%, to end the session at 43,914.12, marking the index’s sixth straight losing day, while the S&P 500 slipped 0.54% to close at 6,051.25 and the tech-heavy Nasdaq dropped 0.66%, slipping back below the 20,000 threshold to finish the day at 19,902.84.
Adam Turnquist, chief technical strategist for LPL Financial, said “the champagne popped yesterday after the Nasdaq Composite Index rallied 1.8% and surpassed the 20,000-point milestone for the first time.”
"The proliferation of Artificial intelligence (AI) over the last two years has been a major driver behind the advance on the tech-heavy index," he said. "However, this has also created building concentration risk as only a select number of mega-cap names continue to drive the outperformance."
And while the AI story is far from over, along with the Nasdaq’s current uptrend, Turnquist said technical evidence suggests the index could be due for a pause or pullback.
"Tactically, this implies investors should consider buying dips for index exposure vs. chasing the latest rally," he said.
Updated at 1:22 PM EST
Long bond auction
The Treasury wrapped-up the third of three coupon auctions this week with a $22 billion sale of 30-year bonds that drew notably weaker interest from foreign and domestic buyers.
Investors placed bids worth $52.6 billion for the sale, generating a demand, or bid-to-cover ratio of 2.39, well shy of the 2.64 ratio recorded during last month's sale.
Benchmark 10-year Treasury note yields rose to 4.312% following the sale, the highest since late November.
US 30-YEAR BOND AUCTION
— NixTrade88 (@NixTrade88) December 12, 2024
BID-TO-COVER RATIO 2.39
HIGH YIELD 4.535% VS 4.523% PRE-SALE WI
SELLS $22 BLN
AWARDS 44.76% OF BIDS AT HIGH
PRIMARY DEALERS TAKE 14.37%
DIRECT 19.1%
INDIRECT 66.53% pic.twitter.com/Wx9dK0fhoC
Updated at 12:08 PM EST
Red day
Stocks are still in the red heading into the afternoon session, held down by a pullback in megacap tech stocks such as Nvidia (NVDA) , Alphabet (GOOGL) and Tesla (TSLA) and a nudge higher in Treasury bond yields following some faster producer price inflation data.
The S&P 500 was last marked 14 points, or 0.2% lower while the Nasdaq fell 66 points, or 0.33%. The Dow was off 85 points while the mid-cap Russell 2000 fell 19 points or 0.78%.
Benchmark 10-year note yields were last up 3 basis points on the day at 4.306%.
SPX ex-Tech P/E hits 20x for the first time in 4 years @WisdomTreeFunds pic.twitter.com/aXc8xW03iM
— Mike Zaccardi, CFA, CMT 🍖 (@MikeZaccardi) December 12, 2024
Updated at 9:34 AM EST
Trump open
The S&P 500 was marked 15 points, or 0.26% lower in the opening minutes of trading after President-elect Donald Trump rang the opening bell at the New York Stock Exchange.
The Nasdaq, meanwhile, was marked 92 points, or 0.45% lower while the Dow gained 10 points following the faster-than-expected factory gate inflation data and the surprise increase in weekly jobless claims.
"With high egg prices appearing to play a key role in the hotter-than-expected headline PPI, traders may be focusing more on the jump in jobless claims," said Chris Larkin, managing director for trading and investing at E*Trade from Morgan Stanley.
"One week doesn’t negate what has been a relatively steady stream of solid labor market data, but the Fed is primed to be sensitive to any signs of a softening jobs picture," he added.
S&P 500 Opening Bell Heatmap (Dec 12, 2024)$SPY -0.17%🟥$QQQ -0.50%🟥$DJI +0.06%🟩$IWM -0.34%🟥 pic.twitter.com/0D9jpiJftP
— Wall St Engine (@wallstengine) December 12, 2024
Updated at 8:37 AM EST
Data dump
Producer price inflation quickened last month, Commerce Department data showed, with the heading reading coming in double Wall Street's forecasts at 0.4%
The year-on-year reading sped to 3%, well ahead of the Street's 2.6% forecast, while the core reading eased to 0.2%, matching analysts' estimates,
The Labor Department, meanwhile, said weekly jobless claims rose by 17,000 to a bigger-than-expected tally of 242,000 over the period ending on December 7, suggesting some labor market weakness into the final weeks of the year.
Benchmark 10-year Treasury note yields eased to 4.285% following the data releases, with 2-year notes pegged at 4.141%.
⚠ U.S. SHORT-TERM INTEREST-RATE FUTURES PARE EARLIER LOSSES AFTER ECONOMIC DATA, AS TRADERS ADD TO BETS ON FED RATE CUTS NEXT YEAR
— PiQ (@PiQSuite) December 12, 2024
Updated at 8:21 AM EST
ECB rate move
The European Central Bank lowered its benchmark deposit rate by a quarter of a percentage point following its two-day policy meeting in Frankfurt in a move that matched economists' forecasts and marked its fourth reduction of the year.
"Most measures of underlying inflation suggest that inflation will settle at around the Governing Council's 2% medium-term target on a sustained basis,' the ECB said in a statement. "Domestic inflation has edged down but remains high, mostly because wages and prices in certain sectors are still adjusting to the past inflation surge with a substantial delay."
The euro was last marked 0.43% lower on the session and trading at 1.0482 against the U.S. dollar following the rate announcement.
We cut our key interest rates by 0.25 percentage points.
— European Central Bank (@ecb) December 12, 2024
Inflation is coming close to our 2% target and the economy is weakening.
Read today’s monetary policy decisions https://t.co/F03sFQatjU pic.twitter.com/VJwucNBnsJ
Stock Market Today
Tech stocks powered markets higher Wednesday following a November inflation report that matched Wall Street's forecasts and cemented the case for an end-of-year rate cut from the Federal Reserve.
Core price pressures held at 3.3%, while the headline reading ticked modestly higher to 2.7%, but both monthly gauges were largely unchanged, allowing the Fed wiggle room for a quarter-point reduction next week in Washington.
Treasury bond yields, however, jumped on the session and in overnight trading, after data showed a staggering $367 billion budget deficit for November, a record that was 17% higher than the same period last year.
The Treasury will sell $22 billion in new 30-year bonds later today.
Getty
Benchmark 10-year note yields, which held steady after a solid auction of $39 billion in new paper yesterday, were last marked 3 basis points higher at 4.302%, with 2-year notes trading at 4.181%.
The U.S. dollar index, meanwhile, was marked 0.12% lower against a basket of its biggest peers ahead of today's European Central Bank rate decision and the Commerce Department's reading of factory gate inflation at 8:30 am Eastern Time.
On Wall Street, stocks are looking at a modestly lower open, with futures contracts tied to the S&P 500 priced for a 12-point decline and those linked to the Nasdaq suggesting a 70-point retreat from last night's close, which was the first ever marked north of 20,000 points.
Tesla (TSLA) shares were marked 0.4% higher in the premarket after closing at a record high, the first since 2021, pegging CEO Elon Musk's net worth at just over $400 billion.
Related: Goldman Sachs analyst reboots Tesla stock price target; share hit fresh record high
Adobe (ADBE) shares, meanwhile, slumped 10.1% after the web-design and graphics software group's muted revenue outlook offset a stronger-than-expected fiscal-fourth-quarter earnings report.
More Wall Street Analysts:
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In overseas markets, Europe's Stoxx 600 was marked 0.1% lower ahead of today's ECB rate decision in Frankfurt. Markets are betting on a fourth reduction from the executive board that would take its base deposit rate to 3%.
Overnight in Asia, Japan's Nikkei 225 following last night's record close for the Nasdaq with a tech-led gain of 1.21%, while the regional MSCI ex-Japan benchmark rose 0.62% into the close of trading.
Related: Veteran fund manager delivers alarming S&P 500 forecast
