Dow futures edged higher while other indexes were struggling for direction Thursday as investors sifted through another fall in weekly first-time applications for jobless benefits as well as an updated look at first-quarter gross domestic product and other economic data.
What are major benchmarks doing?
- Futures on the Dow Jones Industrial Average YM00, +0.50% were up 144 points, or 0.4%, at 34,424.
- S&P 500 futures ES00, +0.19% rose 3.15 points, or less than 0.1%, to 4,196.25.
- Nasdaq-100 futures NQ00, -0.17% shed 38.50 points, or 0.3%, to trade at 13,661.75.
On Wednesday, stocks essentially fought to a draw in another low-volume session, with the Dow DJIA, +0.03% eking out a gain of 10.59 points, or less than 0.1%, while the S&P 500 SPX, +0.19% rose 0.2%. The tech-heavy Nasdaq Composite COMP, +0.59% outpaced its peers, finishing 0.6% higher.
What’s driving the market?
The Labor Department said new applications for regular unemployment benefits fell for the fourth week in a row as the economic recovery from the waning coronavirus pandemic induced companies to hire more workers. Initial jobless claims sank 38,000 to 406,000 in the week ended May 22.
Stocks remain stuck in a holding pattern, analysts said, with investors focused on the Federal Reserve’s slowly shifting rhetoric around when it will begin discussions on pulling back on bond purchases.
On Wednesday, Randal Quarles, the Fed’s vice chairman for supervision, said it would soon be time for Fed officials to begin debating slowing the central bank’s bond purchases, if the economy continues to improve at its current pace. Federal Reserve Vice Chair Richard Clarida also said U.S. central bank officials may be able to begin discussing the appropriate timing of scaling back their bond-buying program at upcoming policy meetings,
Still, long-term Treasury yields remain well below their March peaks “and there’s no sense of panic at all in bond markets about a soon-to-have taper debate at the Fed,” said Raffi Boyadjian, senior investment analyst at XM, in a note.
Trading activity is likely to remain subdued heading into a three-day weekend. U.S. markets will be closed Monday for the Memorial Day holiday.
The S&P 500 index is largely unchanged over the past month, with value indexes substantially outpacing growth, and large-cap stocks beating small-caps, noted Mark Hackett, chief of investment research at Nationwide. Energy, financials and materials have been top performers, while consumer discretionary, technology and utilities are negative.
“As the cycle continues to mature, quality companies on the growth and value spectrum that have strong competitive positions, healthy balance sheets and multiple levers for growth should emerge as leaders, while the expensive ‘story stocks’ on the growth side and deep value could struggle,” he said.
Meme stocks GameStop Corp. GME, +15.82% and AMC Entertainment Holdings Inc. AMC, +19.20% continued to steal the spotlight, with shares soaring for a third day Wednesday as retail traders piled into what is now another squeeze on hedge funds and other institutional investors shorting the stock. GameStop shares were down 3.8% in premarket trade, while AMC fell 5.7%.
In other economic data, the Commerce Department said U.S. gross domestic product grew at a 6.4% annualized pace in the first quarter, unrevised from its initial estimate. Separately, durable-goods orders fell 1.3% in April while so-called core orders rose 1%.
An April pending home-sales index scheduled for 10 a.m. is expected to slow to 1% after a 1.9% March reading.
Which companies are in focus?
- Shares of Nvidia Corp. NVDA, +0.33% were down 0.2% in premarket trade after the gaming specialist reported results late Wednesday that broke several quarterly sales records and forecast revenue growth as much as $ 1 billion above Wall Street estimates for the current quarter amid a global chip shortage.
- Snowflake Inc. SNOW, +2.30% shares fell 3.5% after the software company Wednesday afternoon revealed that losses that were growing at a rate similar to its booming sales totals.
- Okta Inc. OKTA, +0.97% shares dropped 6.6% after the cloud-software company reported fiscal first-quarter results late Wednesday.
- Shares of Workday Inc. WDAY, +0.21% were down 2.8% after the enterprise cloud-software company late Wednesday attributed its first-quarter results to an improving market as companies prepare their businesses for a “post-pandemic world.”
- Dollar Tree Inc. DLTR, +1.39% shares fell after the discount retailer on Thursday delivered full-year earnings guidance below expectations.
- Dollar General Corp. DG, +0.56% shares were lower after the company reported a smaller-than-expected fall in sales and raised guidance.
- Shares of Sanderson Farms Inc. SAFM, +0.20% rose 2.9% after the company on Thursday reported fiscal second-quarter profit and sales that topped expectations, with improved poultry prices more than offsetting “significantly higher” feed grain costs.
- Burlington Stores Inc. BURL, +1.99% shares rose 0.7% after the discount retailer on Thursday blew past earnings estimates for its fiscal first quarter.
- Best Buy Co. Inc. BBY, +2.22% shares rose 2% after the electronics retailer delivered earnings and revenue that topped forecasts and said it sees second-quarter same-store sales up 17%.
- Elf Beauty Inc. ELF, +4.04% late Wednesday reported results that blew past Wall Street expectations for its fiscal fourth quarter and said it expects an increase between 8% and 10% for its sales in fiscal 2022. Shares were down more than 3%.
- Williams-Sonoma Inc. WSM, +2.58% said Wednesday that profit surged in the latest period while revenue rose 42%, reflecting a pandemic boost to home-product sales. Shares rose 2.2%.
- Shares of Zuora Inc. ZUO, +1.76% fell 0.5% after the maker of software for subscription-based businesses delivered results late Wednesday that beat Wall Street expectations.
What are other markets doing?
- The yield on the 10-year Treasury note TMUBMUSD10Y, 1.611% rose 3 basis points to 1.604%. Yields and bond prices move in opposite directions.
- The ICE U.S. Dollar Index DXY, -0.02%, a measure of the currency against a basket of six major rivals, was flat.
- Oil futures were lower, with the U.S. benchmark CL00, -0.17% down 0.7% at $ 65.77 a barrel. Gold futures GC00, -0.06% were also lower, falling 0.5% to $ 1,894 an ounce.
- The Stoxx Europe 600 index SXXP, +0.39% rose 0.2%, while London’s FTSE 100 UKX, -0.03% declined 0.2%.
- The Shanghai Composite SHCOMP, +0.43% rose 0.4%, while the Hang Seng Index HSI, -0.18% in Hong Kong fell 0.2%. Japan’s Nikkei 225 NIK, -0.33% fell 0.3%.