Stocks ended lower Thursday, pausing a record run, as the economy continues to outperform forecasts and Wall Street waits for a crucial jobs report.
The Dow Jones Industrial Average tumbled 248.33 points, or 0.55%, to end the session at 44,765.71, while the S&P 500 slipped 0.19% to close at 6,075.11, and the tech-heavy Nasdaq lost 0.18% to finish the session at 19,700.26.
“Following the S&P 500’s best month of the year in November, the benchmark equity index has continued to set new record highs,” said Jeff Buchbinder, chief equity strategist for LPL Financial. “Already elevated consumer optimism towards the stock market has moved even higher since the start of the Fed’s easing cycle and the U.S. election, partly on hopes of lower taxes, deregulation, and strong corporate profits.”
However, he added, "this support for stocks is offset by stretched valuations, excessively bullish sentiment, and the potential for the economy to cool in 2025."
Updated at 12:42 PM EST
Boeing deal nixed
Boeing BA shares drifted lower after a federal court rejected a plea agreement between the planemaker and the Department of Justice tied to two fatal 737 Max crashes in 2017 and 2018.
The agreement, which would have seen Boeing pay a near $500 million fine and invest a similar amount in safety improvements, was rejected by Judge Reed O'Connor of the Northern District of Texas, who gave the two parties 30 days to come up with a new plea to take the case forward.
Boeing shares were last marked 0.4% lower on the session at $157.75 each following news of the court's decision.
$BA - U.S. COURT REJECTS PLEA AGREEMENT IN BOEING CASE IN DISTRICT COURT NORTHERN DISTRICT OF TEXAS - COURT DOCKET
— *Walter Bloomberg (@DeItaone) December 5, 2024
Updated at 9:40 AM EST
Flat open
The S&P 500 was marked 3 points, or 0.08% lower in the opening minutes of trading, with the Nasdaq rising 10 points, or 0.05%.
The Dow, meanwhile, sipped 85 points while the mid-cap Russell 2000 fell 6 points, or 0.26%.
S&P 500 Opening Bell Heatmap (Dec 05, 2024)$SPY unch⬜$QQQ unch ⬜$DJI -0.06%🟥$IWM -0.15%🟥 pic.twitter.com/9gm3Znl1os
— Wall St Engine (@wallstengine) December 5, 2024
Updated at 9:26 AM EST
American soars
American Airlines Group (AAL) shares powered higher in heavy premarket volume after the carrier lifted its fourth quarter earnings guidance following a record-breaking week of domestic travel over the Thanksgiving holiday.
The group now sees adjusted earnings in the region of 55 cents to 75 cents per share, more than double the lower-end of its earlier forecast, with total revenue per available seat mile, a key industry profit metric rising as high as 1% from last year's levels.
Earlier this week, the Transport Safety Administration said it screened around 3.1 million passengers in U.S. airports on Sunday December 1, marking the single-largest travel day in American history.
American Airlines shares were last marked 7.3% higher in premarket trading to indicate an opening bell price of $15.97 each.
American Airlines $AAL raises Q4 adjusted earnings forecasthttps://t.co/fD6Cvj3xWt pic.twitter.com/0CJCpdKIQY
— Streetinsider.com (@Street_Insider) December 5, 2024
Updated at 8:54 AM EST
Softer jobs data
Around 224,000 Americans filed for first time jobless benefits last week, the Labor Department reported, a modestly higher-than-expected total that, when paired with ADP's disappointing private sector hiring report, could alter forecasts for tomorrow's November non-farm payrolls reading.
Stocks were little-changed, however, in the wake of the release, with the S&P 500 called 4 points lower from last night's record close and the Dow priced for a modest 45 point pullback.
US Initial Jobless Claims Nov 30th: 224K (est 215K; 213prev K; prevR 215K)
— LiveSquawk (@LiveSquawk) December 5, 2024
- Continuing Claims Nov 23rd: 1871K (est 1904K; prev 1907K; prevR 1896K)
Stock Market Today
Stocks ended with a triple set of record highs last night, with the S&P 500 printing its 56th all-time peak of the year and extending its 2024 advance to just under 27%. The market's bullish tenor into the final month of the year continues to support risk appetite.
With the third-quarter-earnings season largely completed and few corporate events on the calendar between now and year's end, markets are firmly focused on macro conditions and the prospect for Federal Reserve interest-rate cuts over the coming months.
The strength of the broader economy, which the Atlanta Fed's GDPNow forecasting tool suggests is growing at a 3.2% pace, formed part of the defense of the Fed's rate policy during Chairman Jerome Powell's appearance at the New York Times DealBook summit yesterday in Manhattan.
“The U.S. economy is in very good shape and there’s no reason for that not to continue," Powell said. "The downside risks appear to be less in the labor market, growth is definitely stronger than we thought, and inflation has come in a little higher."
Markets are still expecting a final 2024 rate cut from the Fed later this month in Washington, but traders have pared back bets on follow-on moves over the first half of next year as inflation, tied to the firmer growth outlook, lingers.
Benchmark 2-year Treasury note yields, the most-sensitive to interest-rate forecasts, were marked 3 basis point lower overnight at 4.184% while 10-year notes held steady at 4.209%.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.12% lower at 106.168.
Related: What's next for stocks after S&P 500 record high?
Risk appetite was also in evidence with the overnight surge in bitcoin, which topped the $100,000 mark for the first time on record to extend its post-election rally to around 40%. The move followed President-elect Donald Trump's selection of Paul Atkins as chairman of the Securities and Exchange Commission.
Atkins, a crypto proponent, is a former SEC commissioner who now advises financial and crypto companies on strategy, risk management and regulation.
The world's biggest cryptocurrency was last marked 3.85% higher on the day at $102,562.80 per bitcoin.
Heading into the start of the trading day on Wall Street, however, investors looked set to hit pause on the early December rally ahead of today's weekly jobless claims data and Friday's November employment report.
Futures contracts tied to the S&P 500 suggest a modest 3-point opening bell decline while those linked to the Dow Jones Industrial Average, which closed north of the 45,000 point mark last night for the first time, suggest a 15-point dip at the start of trading.
The tech-focused Nasdaq, meanwhile, is called 25 points lower, with Nvidia (NVDA) , Tesla (TSLA) and MicroStrategy (MSTR) the most-active names in premarket trading.
More Wall Street Analysts:
- Top analysts unveil their S&P 500 forecasts for 2025
- Analysts overhaul MicroStrategy stock price target amid bitcoin rally
- Google analysts sent scrambling by startling break-up news
In Europe, France's CAC-40 benchmark rose 0.35% in midday Paris trading, while French government bond prices jumped. Prime Minister Michel Barnier resigned after a no-confidence vote toppled his center-right coalition government.
Europe's Stoxx 600 benchmark rose 0.34% in Frankfurt while Britain's FTSE 100 edged 0.05% lower in London.
Overnight in Asia, markets were largely muted with the Nikkei 225 rising 0.3% in Tokyo and the regional MSCI ex-Japan benchmark slipping 0.05% into the close of trading.
Related: Veteran fund manager delivers alarming S&P 500 forecast
