Benchmarks closed in the red on Thursday as unexpected rise in weekly initial jobless claims overshadowed promising corporate earnings results anddeclining number of coronavirus cases.
The Dow Jones Industrial Average (DJI) fell 119.68 points, or 0.4%, to close at 31,493.34 and the S&P 500 lost 17.36 points, or 0.4%, to close at 3,913.97. The Nasdaq Composite Index closed at 13,865.36, declining 100.14 points, or 0.7%. The fear-gauge CBOE Volatility Index (VIX) increased 4.6%, to close at 22.49. Declining issues outnumbered advancing ones for 2.32-to-1 ratio on the NYSE and a 2.28-to-1 ratio on the Nasdaq favored decliners.
How Did the Benchmarks Perform?
On Thursday, the Dow’s was weighed down by a 6.5% decline in shares of Walmart Inc.
WMT
. The retail giant posted fourth-quarter fiscal 2021 earnings of $1.39 per share, which lagged the Zacks Consensus Estimate of $1.51. Walmart also reported that earnings per share will decline, it sees sales growth slowing this year as the pandemic momentum fall back. The retailer carries a Zacks Rank #3 (Hold). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The blue-chip index was also weighed down by a 3.3% decline in shares of The Boeing Company
BA
, followed by 1.9% drop in The Walt Disney Company
DIS
.
The S&P 500 and the Nasdaq slipped for a third day as investors continued rotate out of tech stocks. Of the 11 major sectors of the broader index, nine ended in the red, with the energy sector declining the most closing 2.3% lower for the session. Among the Nasdaq’s biggest decliners are Synopsys, Inc.
SNPS
, Microchip Technology Incorporated
MCHP
and Moderna, Inc.
MRNA
that closed at least 4% lower. Big techs like Apple Inc.
AAPL
and Tesla, Inc.
TSLA
declined 0.9% and 1.4%, respectively on Thursday. So far this week Apple has dropped 4.2% and Tesla slid 3.5%.
Overall, the S&P 500 posted 14 new 52-week highs and no new lows, while the Nasdaq Composite recorded 88 new highs and 16 new lows.
Worse-than-expected Weekly Initial Jobless Claims
On Thursday, the Labor Department reported that initial claims totaled 861,000 for the week ending Feb 13, the highest level in a month and much above the consensus estimate of 766,000. However, it is a slight uptick from the previous week’s revised figure of 848,000, which was initially reported at 793,000.
Additionally, the number of people already collecting unemployment benefits has declined to 4.49 million. Illinois, California and Virginia recorded the highest number of new applications for jobless benefits and the biggest declines took place in Texas and Georgia.
Mixed Housing Data
Yesterday, the U.S. Census Bureau reported that home builders started construction of homes at a seasonally-adjusted annual rate of 1.58 million in January. It is a 6% decline from the previous month’s upwardly revised figure of 1.68 million and much below the consensus estimate of 1.654 million. Single-family housing starts were down 12% across America, while multifamily starts increased 16%. The Northeast region was the only part where housing starts increased in January, a 2.3% rise. The Midwest, West and South witnessed a 12%, 11% and 2.5% decline, respectively.
On the other hand, the same report showed that building permits grew at highest pace since 2006. New home permits jumped 10.4% in January at a seasonally-adjusted annual rate of 1.881 million. January’s figure highlighted a 22.5% jump from the same period last year and surpassed the consensus estimate of 1.685 million. December’s figure was revised downwards to 1.704 million. In the last month, there was an uptick in permits for new multifamily structures. The number of building permits issued for buildings with five or more housing units increased 28%, compared to a 3.8% rise in single-family permits last month.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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