Market resilience meets economic complexity as Q3 GDP surprises, unemployment claims drop and tech sectors experience turbulence amid evolving monetary policy expectations.
The Dow inched up 15.37 points or less than a tenth of a% to 42,342.24, while the Nasdaq slipped 19.92 points or 0.1% to 19,372.77 and the S&P 500 edged down 5.08 points or 0.1% at 5,867.08.The Commerce Department released a report showing the pace of U.S. economic growth unexpectedly surged by more than previously estimated in the third quarter. The GDP shot up by 3.1% in the third quarter, reflecting an upward revision from the 2.8% jump previously reported.
A separate report released by the Labor Department showed first-time claims for U.S. unemployment benefits pulled back by more than expected in the week ended December 14th. The Labor Department said initial jobless claims fell to 220,000, a decrease of 22,000 from the previous week's unrevised level of 242,000.
Housing stocks extended Wednesday's sell-off, with the Philadelphia Housing Sector Index tumbling by 2.6%. The continued weakness among housing stocks came even though the National Association of Realtors released a report showing existing home sales spiked to an eight-month high in November. Commercial real estate stocks too were considerably weak, as reflected by the 1.6% loss posted by the Dow Jones U.S. Real Estate Index. Semiconductor stocks moved significantly downwards dragging the Philadelphia Semiconductor Index down by 1.6%. Computer hardware, oil producer and steel stocks too were notably weak while airline stocks moved sharply higher. Micron (MU) led the sector lower, plummeting by 16.2% after reporting better than expected fiscal first quarter earnings but providing disappointing fiscal second quarter guidance.
Asia-Pacific stocks moved mostly lower Japan's Nikkei 225 Index slid by 0.7%, while China's Shanghai Composite Index fell by 0.4%. The major European markets moved downwards on the day. While the U.K.'s FTSE 100 Index slumped by 1.1%, the French CAC 40 Index tumbled by 1.2% and the German DAX Index dove by 1.4%.
In the bond market, treasuries extended the steep drop seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 7.6 bps to a six-month closing high of 4.57%.
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