US close: Wall Street finishes red as some big names post earnings
Wall Street reversed its earlier fortunes by the closing bell on Thursday, finishing in the red after Federal Reserve chairman Jerome Powell pushed back on expectations for a rate cut during the previous session.
Dow Jones I.A.
38,085.80
04:30 15/10/20
Nasdaq 100
17,430.50
12:15 25/04/24
The Dow Jones Industrial Average ended the session down 0.46% at 26,307.79, the S&P 500 fell 0.21% to 2,917.52, and the Nasdaq 100 was off 0.36% at 7,724.06.
At the open, the Dow managed to rise 12 points after the Federal Reserve conceded overnight that inflation was running below target but attributed that to transitory factors.
"Fed Chair Powell pushed back quite strongly in the press conference against the idea that the unexpected drop in core inflation in first quarter represents a shift in the trend," said Ian Shepherdson at Pantheon Macroeconomics.
"He argued that some, or even, all the downshift is due to 'transient or idiosyncratic' factors, including the huge drop in prices for certain financial services in the wake of the plunge in stock prices and the flattening of the yield curve in the fourth quarter."
Donald Trump had implored the Fed to cut rates and increase stimulus before the meeting.
On the data front, the number of Americans filing for unemployment benefits was unexpectedly flat at a three-month high last week, according to figures from the Labor Department.
US initial jobless claims were steady at 230,000, missing expectations for a drop to 215,000.
Pantheon Macroeconomics said the figures were more evidence that the unexpected drop in claims from mid-March through mid-April was more noise than signal.
Elsewhere, labour productivity in the States grew at its fastest pace in over eight years at the start of 2019, edging past its post-WWII average, but economists cautioned such gains could not be sustained.
According to the Department of Labor, non-farm labour productivity in the US picked up from the quarterly annualised pace of 1.3% observed over the last three months of 2018 to 3.6%, against a consensus forecast for 0.9%, which was the best reading since the third quarter of 2010.
Higher productivity dragged on unit labour cost growth, with the rate of increase in the latter slipping from 2.5% to -0.9%.
Lastly, factory orders jumped in March after showing declines in two consecutive months, according to the Commerce Department.
Orders rose a seasonally adjusted 1.9% after a revised 0.3% drop in February, just ahead of the 1.7% gain expected on the Street.
In corporate news, Dow - the materials science unit the split from DowDuPont on 1 April - slid 6.14% amid concerns of "discrete headwinds" in the second quarter offsetting much of the positivity surrounding news of its smaller than expected loss in the first.
Multi-level marketing firm Avon Products was off 10.48% on the back of its first-quarter figures.
Cereal empire Kellogg Company lost 3.38% after it announced plans to switch out its chief financial officer following a massive earnings drop, while Under Armour shares ran ahead 354% after topping estimates.