US stocks struggled for direction Thursday after ending a four-day rally to close lower in the previous session amid faded optimism over Russia-Ukraine ceasefire talks and mixed economic data.
The S&P 500 fell about 0.2% and the Dow Jones Industrial Average fell 100 points. The Nasdaq Composite was down 0.2%. The moves come after the S&P 500 and Dow each embarked on a four-day winning streak on Wednesday. The Nasdaq lost momentum after closing at its highest level since mid-January on Tuesday. Oil prices fell sharply early Thursday after swinging higher for the first time in three sessions the previous trading day as hopes of a de-escalation in the war in Eastern Europe faded. WTI crude oil futures fell 4.7% to around $103 a barrel.
Russian forces continued attacks on Kyiv and northern Ukraine despite Moscow pledged to ease its military actions in the areas during peace talks in Istanbul earlier this week. According to the United Nations, the number of people in Ukraine who have fled their homes to escape the invasion and seek safety has reached 4 million on Wednesday.
Equities had a tumultuous start to the year as a series of headwinds — geopolitical turmoil, rising inflation, supply chain imbalances and central bank tightening — roiled financial markets. Still, since Tuesday’s close, the S&P 500 is up 11% from its low for the year in early March and just 4% from making a new all-time high after a recent comeback. Based on more than seven decades of data, the momentum is likely to continue despite some everyday fluctuations.
“The good news is that stocks seem to be really loving April,” LPL Financial chief market strategist Ryan Detrick said in a note, noting that the month has closed green every year since 2006 except for 2012. “Not only is it the best month on average since 1950, but it’s also been an incredible 15 of the last 16 years higher.”
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Despite a reassuring outlook for the month ahead, another historic track record is worrying market participants. Investors are nervously watching a flattening US Treasury yield curve, with yields on longer-duration bonds falling more than those on the short-term as traders bet on higher Federal Reserve rates in the short-term and longer-term weigh a clouded macroeconomic outlook-term.
The spread, or difference between 2-year and 10-year Treasury note yields, narrowed to its lowest level since 2019 earlier this week and briefly reversed on Tuesday. The phenomenon has historically predicted a recession, with each of the last eight recessions dating back to 1969 and preceded by a yield curve inversion.
“We want to make sure we’re not focusing too much on the yield curve issues, which some people think signals a recession,” JoAnne Feeney, partner and portfolio manager at Advisors Capital Management, told Yahoo Finance Live. “We think it’s very dangerous right now to use historical episodes of yield curve inversion to predict what’s going to happen now.”
Feeney pointed to near-record job vacancies (Labour Department Job Vacancy and Labor Turnover Summary). [JOLTS] came to 11.283 million in January) and said the US economy is still coming out of COVID and COVID-like behavior.
More job details will be released this week. The Labor Department’s weekly jobless claims due Thursday are expected to show jobless claims again near a 50-year low, with economists forecasting a reading of 196k, according to Bloomberg data. Jobless claims on Friday will serve as the prelude to the even more consequential monthly jobless report for March, which Bloomberg economists estimate is expected to show another robust reading of 490,000 payrolls added. In a busy week for jobs reports, ADP also reported that private sector payrolls rose 455,000 on Wednesday last month as the economy faced persistent labor shortages and widespread job vacancies.
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9:30 am ET: Stocks are fighting for direction after ending 4-day rally
Here’s how Wall Street’s top benchmarks opened Thursday’s session:
S&P 500 (^GSPC): -6.82 (-0.15%) to 4,595.63
dow (^ DJI): -98.72 (-0.28%) to 35,130.09
Nasdaq (^IXIC): +0.03 (+0.00%) to 14,442.31
raw (CL=F): -$4.61 (-4.28%) to $103.21 a barrel
Gold (GC=F): +$3.70 (+0.19%) to $1,942.70 per ounce
10-year government bonds (^TNX): -3.5 bps gives 2.3230%
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8:30 am ET: New jobless claims rise slightly to 202k after hitting a 50-year low
Jobless insurance claims edged higher in the latest weekly data after hitting a more than 50-year low as employers remain reluctant to downsize in the current competitive job market.
The latest weekly jobless report from the Labor Department showed that 202,000 claims were filed in the week ended March 26, more than the 196,000 economists polled by Bloomberg were expecting.
Weekly jobless claims edged up for the first time in three weeks, but rose only marginally from multi-decade lows hit just last week. At 188,000, the number of new jobless claims last week marked the lowest level since September 1969.
The job market remains a strong point of the US economy, with job openings still high but declining from record levels as more workers re-enter the workforce from the sidelines.
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8:26 am ET: Walgreens beat estimates on boost from Omicron-led vaccine and testing onslaught
Walgreens Boots Alliance Inc. (WBA) reported better-than-expected quarterly earnings and sales for the fiscal second quarter, thanks to high demand for COVID-19 vaccinations and testing during the Omicron-led spike in COVID-19 cases earlier this year famous .
The pharmacy chain carried out 11.8 million vaccinations and 6.6 million tests in the period up to February 28. Walgreens expects to roll out 30 million vaccinations at its sites this year.
However, the company’s U.S. pharmacy fell 3.3% in the quarter, hurt by a weak performance by AllianceRx Walgreens’ mail-order business. Total revenue rose 3% to $33.77 billion, beating estimates of $33.40 billion.
Excluding special items, the company earned $1.59 per share compared to Bloomberg consensus estimates of $1.37 per share.
Shares are down 2% to $46.50 a share in premarket trading as of 8:26 a.m. ET.
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7:11 am ET: Contracts on S&P 500, Dow and Nasdaq little changed
Here were the key moves in the markets ahead of Thursday’s open:
S&P 500 Futures (ES=F): +3.25 points (+0.07%) to 4,599.25
Dow futures (YM=F): -12.00 points (-0.03%) to 35,105.00
Nasdaq futures (NQ=F): +47.00 points (+0.13%) to 15,118.50
raw (CL=F): -$6.95 (-06.46%) to $100.85 per barrel
Gold (GC=F): -$4.80 (-0.25%) to $1,934.20 per ounce
10-year government bonds (^TNX): 0.00 bps gives 2.3580%
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6:16 p.m. ET Wednesday: Futures open unchanged ahead of the last trading day of March
Here are the major stock index futures open heading into Wednesday’s overnight session:
S&P 500 Futures (ES=F): +4.50 points (+0.10%) to 4,600.50
Dow futures (YM=F): +11.00 points (+0.03%) to 35,128.00
Nasdaq futures (NQ=F): +31.25 points (+0.21%) to 15,102.75
raw (CL=F): -$0.32 (-0.30%) to $107.50 per barrel
Gold (GC=F): $0.00 (0.00%) to $1,933.50 per ounce
10-year government bonds (^TNX): -4.2 bps gives 2.3580%
NEW YORK, NEW YORK – MARCH 30: Traders work on the floor of the New York Stock Exchange on March 30, 2022 in New York City. US stocks opened low after rallying earlier in the week. (Photo by Michael M. Santiago/Getty Images)
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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