US close: Stocks lower as FOMC suggests more rate hikes likely
US markets finished as they started on Thursday, in the red, following strong gains during the previous session on the back of a seemingly dovish speech from Federal Reserve Chairman Jerome Powell.
The Dow Jones Industrial Average was off 0.11 at 25,338.84, the S&P 500 lost 0.22% to 2,737.76, and the Nasdaq 100 was 0.3% weaker at 6,892.40.
On Wednesday, the Dow surged more than 600 points after Powell said US interest rates were "just below" neutral levels, barely two months after saying they were "a long way" from neutral, leading US equity markets to their best session since March.
“If a December pop for equities, or Santa Rally, were going to occur then a more easy Fed will do it,” said Neil Wilson, chief market analyst at Markets.com.
“The softer language from the Fed will be heard loud and clear by equity markets as a sign it's aware of the risks of tightening too quickly.
“Of course, there is another way to read it. In some ways this was about correcting a pretty basic error when he said rates are long way from neutral.”
Wilson said the “off-the-cuff” comment sparked the equity selloff from which markets were still struggling to recover.
On the macroeconomic calendar, the number of Americans filing for unemployment benefits unexpectedly rose last week to a six-month high, according to figures from the Labor Department.
US initial jobless claims increased 10,000 from the previous week's level to 234,000, versus expectations for a drop to 220,000.
Meanwhile, the four-week moving average came in at 223,250, up 4,750 from the previous week's level of 218,500.
Elsewhere, consumer spend in the US snapped back last month, mirroring the improvement seen in personal incomes and helped by a dip in prices.
According to the Department of Commerce, in October and in nominal terms personal incomes and spending increased at a month-on-month clip of 0.5% and 0.6%, respectively.
Economists had anticipated an increase of 0.4% in both.
Downwards revisions to the August and September readings for personal consumption expenditures meant that the October tally was in fact a tad weaker than anticipated, although PCE outlays did accelerate significantly after a downwardly revised month-on-month increase of 0.2% for September.
The headline PCE price deflator was unchanged at up by 2.0% year-on-year, but at the 'core' level, which is the Federal Reserve's preferred inflation gauge, PCE inflation slipped from 1.9% to 1.8%.
America’s personal savings rate dipped by a tenth of a percentage point from September's upwardly revised 6.3% to 6.2% of Americans' disposable income.
Lastly, contracts to buy previously-owned homes fell across the US in October, according to new data. said on Thursday.
The NAR’s pending home sales index decreased to a reading of 102.1, down 2.6% month-on-month, while September’s reading was revised up to 104.8 from 104.6.
Economists had expected pending home sales to rise 0.5% last month.
And late in the session, the latest minutes from the Federal Open Market Committee suggested most members believed another increase in the target interest rate range was likely to be warranted soon.
In corporate news, clothing retailer Abercrombie and Fitch soared 20.91% after raising its fourth-quarter guidance.
Dollar Tree was 6.12% firmer despite missing same-store estimates.
Dow Jones - Risers
Boeing Co. (BA) $342.56 7.71%
Caterpillar Inc. (CAT) $130.23 4.52%
Chevron Corp. (CVX) $118.83 3.16%
Walt Disney Co. (DIS) $116.59 2.38%
Home Depot Inc. (HD) $175.70 1.41%
Pfizer Inc. (PFE) $45.51 1.36%
International Business Machines Corp. (IBM) $121.48 1.21%
American Express Co. (AXP) $111.30 1.09%
Merck & Co. Inc. (MRK) $77.91 0.89%
Exxon Mobil Corp. (XOM) $79.06 0.78%
Dow Jones - Fallers
Intel Corp. (INTC) $47.70 -2.37%
Visa Inc. (V) $139.12 -1.61%
Coca-Cola Co. (KO) $48.98 -1.47%
United Technologies Corp. (UTX) $121.20 -1.25%
Verizon Communications Inc. (VZ) $59.45 -1.02%
Microsoft Corp. (MSFT) $110.19 -0.84%
JP Morgan Chase & Co. (JPM) $110.11 -0.79%
Apple Inc. (AAPL) $179.55 -0.77%
Nike Inc. (NKE) $74.34 -0.43%
Johnson & Johnson (JNJ) $145.85 -0.40%
S&P 500 - Risers
Salesforce.Com Inc. (CRM) $139.72 9.55%
Boeing Co. (BA) $342.56 7.71%
Diamond Offshore Drilling Inc. (DO) $12.95 6.76%
General Electric Co. (GE) $7.94 6.72%
Humana Inc. (HUM) $330.29 6.67%
Dollar Tree Inc (DLTR) $88.43 6.13%
Edwards Lifesciences Corp. (EW) $162.80 5.36%
Freeport-McMoRan Inc (FCX) $11.82 5.16%
Abbott Laboratories (ABT) $73.25 5.09%
Boston Scientific Corp. (BSX) $37.04 5.05%
S&P 500 - Fallers
Quest Diagnostics (DGX) $87.94 -7.10%
Western Digital Corp. (WDC) $45.52 -5.46%
Wynn Resorts Ltd. (WYNN) $108.12 -4.15%
Nordstrom Inc. (JWN) $52.30 -4.00%
Seagate Technology Plc (STX) $42.65 -3.29%
Charles Schwab Corp. (SCHW) $44.16 -3.29%
NetApp Inc. (NTAP) $67.40 -2.99%
Tiffany & Co. (TIF) $89.77 -2.99%
Kohls Corp. (KSS) $67.10 -2.95%
Juniper Networks Inc. (JNPR) $28.59 -2.89%
Nasdaq 100 - Risers
Dollar Tree Inc (DLTR) $88.43 6.13%
Mercadolibre Inc. (MELI) $357.99 3.53%
Activision Blizzard Inc. (ATVI) $52.56 3.02%
QUALCOMM Inc. (QCOM) $58.11 2.58%
Netflix Inc. (NFLX) $288.75 2.16%
Sirius XM Holdings Inc (SIRI) $6.32 2.10%
Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) $300.37 1.77%
Autodesk Inc. (ADSK) $145.55 1.67%
Facebook Inc. (FB) $138.68 1.40%
Take-Two Interactive Software Inc. (TTWO) $111.91 1.16%
Nasdaq 100 - Fallers
Western Digital Corp. (WDC) $45.52 -5.46%
NetEase Inc. Ads (NTES) $223.23 -4.44%
Wynn Resorts Ltd. (WYNN) $108.12 -4.15%
Seagate Technology Plc (STX) $42.65 -3.29%
Align Technology Inc. (ALGN) $228.70 -2.92%
Ctrip.Com International Ltd. Ads (CTRP) $28.04 -2.84%
Baidu Inc. (BIDU) $183.22 -2.77%
Intel Corp. (INTC) $47.70 -2.37%
J.B. Hunt Transport Services Inc. (JBHT) $106.24 -2.21%
Micron Technology Inc. (MU) $37.91 -2.07%