Following a late-session sell-off, stocks made a notable resurgence in early trading on Thursday. However, buying enthusiasm diminished as the trading day progressed, with major averages ultimately ending close to unchanged.
The Dow Jones Industrial Average managed to break its ten-day losing streak, gaining a modest 15.37 points or less than 0.1 percent to close at 42,342.24. Meanwhile, the Nasdaq Composite dipped 19.92 points or 0.1 percent to 19,372.77, and the S&P 500 slipped 5.08 points or 0.1 percent to end at 5,867.08.
The initial upswing on Wall Street was attributed to traders seeking to acquire stocks at lower valuations after Wednesday's significant decline, which saw the Dow close at its lowest level in over a month. This sell-off followed the Federal Reserve's anticipated decision to cut interest rates by a quarter percentage point while signaling fewer rate cuts than previously expected for the coming year.
Despite this, traders appeared hesitant to re-enter the markets, as a collection of largely positive economic data seemingly lent credence to the Fed's cautious stance on further rate reductions.
The Commerce Department released a report indicating that U.S. economic growth accelerated unexpectedly in the third quarter, exceeding prior estimates. Gross domestic product (GDP) surged by 3.1 percent, outperforming the initial 2.8 percent estimate. Economists had anticipated no revision to the growth rate.
Additionally, a report from the Labor Department revealed that first-time claims for U.S. unemployment benefits decreased more than expected in the week ending December 14th. Initial jobless claims fell to 220,000, a decline of 22,000 from the previous week's unrevised figure of 242,000, contrary to economists' predictions of 230,000 claims.
**Sector Analysis**
Interest rate-sensitive housing stocks extended their losses from Wednesday, with the Philadelphia Housing Sector Index falling 2.6 percent to its lowest close in over five months. This continued downturn occurred despite a report from the National Association of Realtors showing existing home sales climbed to an eight-month peak in November.
Commercial real estate stocks also exhibited significant weakness, as evidenced by the Dow Jones U.S. Real Estate Index's 1.6 percent decrease. Semiconductor stocks further contributed to the decline, with the Philadelphia Semiconductor Index dropping 1.6 percent. Micron Technology led the sector lower, plummeting by 16.2 percent following better-than-expected fiscal first-quarter earnings but offering disappointing guidance for the fiscal second quarter.
Stocks in the computer hardware, oil production, and steel sectors also faced notable declines, while airline stocks experienced a sharp surge.
**Global Market Overview**
Internationally, stock markets across the Asia-Pacific region tended to decline on Thursday. Japan’s Nikkei 225 Index fell by 0.7 percent, and China’s Shanghai Composite Index decreased by 0.4 percent. European markets displayed similar downward trends, with the U.K.'s FTSE 100 Index dropping by 1.1 percent, France’s CAC 40 Index by 1.2 percent, and Germany’s DAX Index by 1.4 percent.
In the bond market, treasuries experienced an extension of the previous session’s steep decline, resulting in the yield on the benchmark ten-year note, inversely related to its price, rising by 7.6 basis points to a six-month high of 4.570 percent.
**Looking Ahead**
Attention on Friday will likely focus on a report detailing personal income and spending for November, including important indicators of consumer price inflation favored by the Fed.
The material has been provided by InstaForex Company -
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