Better-than-expected report on jobless claims restrict losses
U.S. stocks ended Thursday's choppy session lower on 26 March 2015, declining for the fourth consecutive session. Equity indices could not avoid registering their fourth consecutive decline, but they were able to avoid settling on their lows. The market began the day under pressure after overnight reports revealed that coalition forces from ten countries, led by Saudi Arabia, carried out air strikes against rebel forces in Yemen. This followed yesterday's reports indicating Yemen's President Hadi fled his country by sea. Investors remain nervous amid concerns over poor earnings prospects and worries that the Federal Reserve is moving closer to a rate hike.
The Dow Jones Industrial Average in early trade declined more than 100 points, but closed 40.31 points, or 0.2%, lower at 17,678.23. The Nasdaq Composite ended the session down 13.16 points, or 0.3%, to 4,863.36. The S&P 500 ended 4.90 points, or 0.2% lower at 2,056.15 with eight of its 10 sectors closing in the red. Technology stocks which took a beating on Wednesday rebounded, but modest gains weren't enough to lift the markets.
Ahead of the opening bell, a better-than-expected report on jobless claims did little to alleviate concerns of a marked slowdown in the economy during the first quarter.
In the technology sector, large cap names like Apple, IBM and Oracle gained between 0.1% and 0.9%. The tech sector managed to turn positive despite notable weakness among chipmakers. The industry group struggled after SanDisk lowered its Q1 revenue guidance below analyst estimates.
Saudi Arabia and its allies' air strikes against Iran-backed rebels in Yemen have produced fresh geopolitical tension. Saudi Arabia and Iran, the two major Middle East powers, are now in a stare-down. Crude oil prices rallied sharply to a two-week high above $52.00 a barrel on the news, while safe-haven gold also posted decent gains.
Reports overnight said China has moved to allow more companies to import gold into China, which will effectively reduce the premium China's domestic gold-buyers have had to pay over the world price. The move by Chinese authorities should give a modest boost to gold demand coming from China. The World Gold Council said Chinese demand for imported gold is likely to rise by 11% this year.
Economic data was limited to weekly initial claims, which declined to 282,000 from last week's unrevised 291,000 while the consensus expected a reading of 290,000. After three weeks above 300,000, the 4-week moving average for initial claims has dropped below that threshold, suggesting the claims level is reestablishing a trend below 300,000.
Bullion prices ended closes to 1% higher on Thursday, 26 March 2015 at Comex. Gold futures rallied past $1,200 an ounce on Thursday to settle at their highest level since early March as investors backed away from riskier assets amid a selloff for global equities and increased tension in the Middle East.
Gold for April delivery climbed $7.80, or 0.7%, to settle at $1,204.80 an ounce on Comex. Prices have now climbed for seven sessions in a row, tallying a total gain of 4.9% during their streak of gains. May silver added 14 cents, or 0.8%, to end at $17.14 an ounce.
Today's participation was above average with more than 808 million shares changing hands at the NYSE floor.
Crude oil futures jumped past $50 a barrel on Thursday, 26 March 2015 and headed for their fifth straight daily gain as Saudi Arabian airstrikes in Yemen raised fresh concerns over potential disruptions to crude supplies.
May crude climbed 98 cents, or 2%, to $50.19 a barrel on the New York Mercantile Exchange. It hit an intraday high of $52.48 a barrel.
Tomorrow, the third estimate of Q4 GDP will be released at 8:30 ET (consensus 2.4%) while the final reading of the Michigan Sentiment Index for March (consensus 92.0) will cross the wires at 10:00 ET.
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