U.S. Stocks Finish Volatile Session Modestly Lower
Stocks moved notably higher early in the session on Thursday but failed to sustain the upward move and fluctuated over the course of the trading day.
The major averages swung back and forth across the unchanged line in morning trading before sliding more firmly into negative territory in the early afternoon only to regain ground in the latter part of the session.
The major averages eventually ended the day modestly lower. The Dow fell 151.95 points or 0.4 percent to 42,392.27, the Nasdaq dipped 30.00 points or 0.2 percent to 19,280.79 and the S&P 500 slipped 13.08 points or 0.2 percent to 5,868.55.
The early strength on Wall Street came as some traders looked to pick up stocks at relatively reduced levels following the notable downward move seen to close out 2024.
Buying interest waned shortly after the start of trading, however, as a Labor Department report showing an unexpected decline by weekly jobless claims seemingly provides support for the Federal Reserve’s measured approach to lowering interest rates.
The report said initial jobless claims slipped to 211,000 in the week ended December 28th, a decrease of 9,000 from the previous week’s revised level of 220,000.
The dip surprised economist, who had expected jobless claims to inch up to 222,000 from the 219,000 originally reported for the previous week.
With the unexpected decrease, jobless claims fell to their lowest level since hitting 209,000 in the week ended April 27, 2024.
“The claims data are consistent with a labor market that is strong enough to allow the Federal Reserve to proceed with rate cuts at a more measured pace in 2025,” said Nancy Vanden Houten, Lead US Economist at Oxford Economics.
She added, “Our baseline is for three rate cuts this year, although the risk following the mid-December FOMC meeting is for fewer cuts.”
The subsequent volatility may have reflected below average volume, as many traders remained away from their desks following the New Year’s Day holiday on Wednesday.
The modestly lower close by the broader markets came amid a slump by shares of Tesla (TSLA), with the electric vehicle maker plunging by 6.1 percent after nt Apple (AAPL) also tumbled by 2.6 percent following news the company is offering discounts on its latest iPhone models in China amid heightened competition.
Sector News
Despite the modestly lower close by the broader markets, gold stocks moved sharply higher on the day, resulting in a 4.4 percent spike by the NYSE Arca Gold Bugs Index. The rally by gold stocks came amid a jump by the price of the precious metal.
A surge by the price of crude oil also contributed to significant strength among oil producer stocks, as reflected by the 1.3 percent gain posted by the NYSE Arca Oil Index.
Natural gas and brokerage stocks also saw considerable strength, while housing, airline and commercial real estate stocks showed notable moves to the downside.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Thursday. China’s Shanghai Composite Index and Hong Kong’s Hang Seng Index tumbled by 2.7 percent and 2.2 percent, respectively, while Australia’s S&P/ASX 200 Index climbed by 0.5 percent.
Meanwhile, the major European markets all moved to the upside on the day. While the U.K.’s FTSE 100 Index jumped by 1.1 percent, the German DAX Index advanced by 0.6 percent and the French CAC 40 Index rose by 0.2 percent.
In the bond market, treasuries pulled back near the unchanged line after seeing early strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 4.575 percent after hitting a low of 4.517 percent.
Looking Ahead
Trading on Friday may be impacted by reaction to a report on U.S. manufacturing sector activity in the month of December.
https://www.howestreet.com/2025/01/while-market-soft-some-individual-stocks-still-hot-mark-leibovit/
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