Weekly jobless claims fall to a five-year low
US stocks ended with moderate losses on Thursday, 09 May 2013. Earlier during the day, stocks tallied mild gains on Thursday afternoon extending Wall Street's record-setting streak, as data showed that weekly jobless claims fell to a five-year low. After opening in the red, the major averages were able to shake off their early weakness before a wave of afternoon selling sent them to fresh lows. The decline occurred amid speculation regarding changes to the Federal Reserve's quantitative easing program.
For the day, the Dow ended lower by 22.5 points (0.15%) at 15,082.62. Nasdaq ended lower by 4.1 points (0.12%) at 3,409.17. S&P 500 ended lower by 6.02 points (0.4%) at 1,626.7. Dow traded higher by 39 points earlier during the day.
Utilities was the hardest hit and health care fared best among its ten major sectors.
China on Thursday reported its producer price index dropped more than expected in April, which suggests slowing production in China. Meantime, China also reported its consumer price inflation rate rose more than expected, up 2.4% versus expectations of a 2.2% rise, on an annual basis which suggests China monetary officials could tighten monetary policy to ward off inflationary price pressures. Thursday's data from the world's largest raw commodity consumer is bearish for that sector, including the precious metals.
In other news, the Bank of Korea unexpectedly cut its interest rates overnight, while the Bank of England left its monetary policy unchanged. The European Central Bank reported Thursday that the Euro zone economy remains weak and could get weaker.
Latest economic data from US showed that the initial claims level fell from an upwardly revised 327,000 (from 324,000) for the week ending April 27 to 323,000 for the week ending May 4. The consensus expected the initial claims level to increase to 336,000. Today's reading puts claims at their lowest level since January 2008. Typically, a sub-350,000 initial claims level would imply that payrolls would grow by at least 200,000. However, with uncertain demand, it is not guaranteed that firms will add to their workforce.
Also of note, wholesale inventories increased 0.4% in March after declining 0.3% in February. The consensus expected wholesale inventories to increase 0.3%.
In the currency market, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, rose by 0.8% on Thursday.
Discount retailers like Fred's and TJX Companies ended with gains after reporting better-than-expected same store sales. Industrial shares displayed some intraday strength in defense stocks following a bottom-line beat from Precision Castparts.
In addition, Boeing was higher by 0.7% after All Nippon Airways said the Dreamliner will return into service on June 1.
Bullion metal prices ended moderately lower on Thursday, 09 May 2013. Comex gold futures ended the U.S. day session modestly lower on Thursday, on a corrective pullback from Wednesday's solid gains, some weak economic data from China, and on bearish outside market forces of a firmer U.S. dollar index and weaker crude oil prices.
Gold for June delivery ended lower by $5.1 (0.4%) at $1,468.6 an ounce on the Comex division of the New York Mercantile Exchange on Thursday. July silver ended lower by $0.02 cents (0.1%) at $23.91 an ounce on Thursday.
Light and sweet crude for June ended lower by $0.23 (0.2%) at $96.39 a barrel on the New York Mercantile Exchange on Thursday.
For every stock on the rise, nearly two fell on the New York Stock Exchange, where 662 million shares traded. Composite volume approached 3.4 billion
Indian ADRs ended lower on Thursday. In the IT space, Infosys was down 1.3% and Wipro was down 1.1%. In the Banking space, HDFC Bank was down 2.4% and ICICI Bank was down 1.1%. In the Telecom space, Tata Communication was down 2.1%. In other space, Tata Motors was down 1.1%, Dr Reddys was down 0.8% and Sterlite was down 3.4%.
Tomorrow, economic data will be limited to the April Treasury budget, which is set to be reported at 14:00 ET. Among earnings of note, ArcelorMittal will report its quarterly results before the opening bell.
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