Market declines led by shares of communication services sector after Meta Platforms provided disappointing second quarter revenue guidance and IBM Corp reported weaker than expected first quarter revenues.
At closing bell, the Dow Jones Industrial Average index was down 375.12 points, or 0.98%, to 38,085.80. The S&P500 index declined 23.21 points, or 0.46%, to 5,048.42. The tech-heavy Nasdaq Composite index decreased by 100.99 points, or 0.64%, to 15,611.76.
Total 6 of 11 S&P500 sectors closed lower along with S&P500 index, with communication services sector being bottom performer, falling 4.02%, while material sector was top performer, rising 0.93%.
Among individual stocks, Meta Platforms shares fell 10.6% after the company provided disappointing second quarter revenue guidance despite first quarter results that beat estimates on both the top and bottom lines.
IBM Corp shares fell 8.3% after reporting weaker than expected first quarter revenues. IBM also announced a deal to acquire HashiCorp (HCP) for $35 per share in cash, representing an enterprise value of $6.4 billion.
ECONOMIC NEWS: US GDP Growth Slows To 1.6% In Q1- A report released by the Commerce Department on Thursday showed the U.S. economy grew by much less than expected in the first quarter of 2024. The Commerce Department said gross domestic product increased by 1.6% in the first quarter after surging by 3.4% in the fourth quarter of 2023. The GDP growth in the first quarter reflected increases in consumer spending, residential fixed investment, nonresidential fixed investment, and state and local government spending. However, the positive contributions were partly offset by a decrease in private inventory investment and an increase in imports, which are a subtraction in the calculation of GDP. The Commerce Department said the notable slowdown in GDP growth compared to the previous quarter primarily reflected decelerations in consumer spending, exports, and state and local government spending and a downturn in federal government spending. The report showed consumer spending growth slowed to 2.5% in the first quarter from 3.3% in the fourth quarter, with an increase in spending services partly offset by a decrease in spending on goods. On the inflation front, the Commerce Department said the personal consumption expenditures price index surged 3.4% in the first quarter after advancing by 1.8% in the fourth quarter. Excluding food and energy prices, the PCE price index spiked 3.7% in the first quarter after jumping by 2.0% in the fourth quarter.
US Wholesales Inventories Down 2.1% On Year In March- The U.S. Census Bureau announced the wholesale inventories and retail inventories advance statistics for March 2024. Wholesale inventories for March were estimated at an end-of-month level of $896.2 billion, down 0.4% from February 2024, and were down 2.1% from March 2023. The January 2024 to February 2024%age change was revised from the preliminary estimate of up 0.5% to up 0.4%. Retail inventories for March were estimated at an end-of-month level of $788.1 billion, up 0.3% from February 2024, and were up 4.4% from March 2023. The January 2024 to February 2024%age change was unrevised from the estimate of up 0.5%.
US Trade Deficit At $91.8 Billion In March- The U.S. Census Bureau announced the international trade advance statistics for March 2024. The international trade deficit was $91.8 billion in March, up $1.5 billion from $90.3 billion in February. Exports of goods for March were $169.2 billion, $6.1 billion less than February exports. Imports of goods for March were $261.0 billion, $4.6 billion less than February imports.
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US Pending Home Sales Surge 3.4% In March- Pending home sales in the U.S. surged by much more than expected in the month of March, according to a report released by the National Association of Realtors on Thursday. NAR said its pending home sales index spiked by 3.4% to 78.2 in March after jumping by 1.6% to 75.6 in February. A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale. Pending home sales in the South and West led the sharp monthly increase, soaring by 7.0% and 6.8%, respectively. The report said pending home sales in the Northeast also jumped by 2.7%, while pending home sales in the Midwest plunged by 4.3%. NAR also revealed it expects existing sales to surge by 9.0% to 4.46 million in 2024 and skyrocket by another 13.2% to 5.05 million in 2025.
US Weekly Jobless Claims Dip To Two-Month Low- The Labor Department released a report on Thursday showing an unexpected decrease by first-time claims for U.S. unemployment benefits in the week ended April 20th. The report said initial jobless claims fell to 207,000, a decrease of 5,000 from the previous week's unrevised level of 212,000. With the unexpected decline, jobless claims dropped to their lowest level since hitting 200,000 in the week ended February 17th. The Labor Department said the less volatile four-week moving average also edged down to 213,250, a decrease of 1,250 from the previous week's unrevised average of 214,500. Continuing claims, a reading on the number of people receiving ongoing unemployment assistance, also slid by 15,000 to 1.781 million in the week ended April 13th. The four-week moving average of continuing claims also fell to 1,794,000, a decrease of 7,250 from the previous week's revised average of 1,801,250.
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