U.S. Stocks Close Little Changed After Recovering From Morning Lows

Stocks fluctuated over the course of the trading session on Thursday before ending the day little changed. The major averages recovered from an early move to the downside but eventually finished the session on opposite sides of the unchanged line.

After tumbling by nearly 275 points in morning trading, the Dow closed down just 63.07 points or 0.2 percent at 34,751.32. The S&P 500 also dipped 6.95 points or 0.2 percent to 4,473.75, while the Nasdaq inched up 20.40 points or 0.1 percent to 15,181.92.

The lackluster close on Wall Street came following the release of a report from the Commerce Department showing an unexpected rebound in U.S. retail sales in the month of August.

The Commerce Department said retail sales climbed by 0.7 percent in August after plunging by a revised 1.8 percent in July.

The rebound surprised economists, who had expected retail sales to decrease by another 0.8 percent compared to the 1.1 percent slump originally reported for the previous month.

Excluding a continued nosedive in sales by motor vehicle and parts dealers, retail sales surged up by 1.8 percent in August after tumbling by a revised 1.0 percent in July.

Economists had expected ex-auto sales to edge down by 0.2 percent compared to the 0.4 percent drop originally reported for the previous month.

While the rebound in retail sales partly reflected a shift back to online spending amid the spread of the delta variant of the coronavirus, the resilience shown by consumers may encourage the Federal Reserve to follow through on plans to begin tapering its asset purchases later this year.

Recent signs of slowing economic momentum had generated optimism the Fed could delay tapering plans, allowing the central bank’s asset purchases to continue propping up stocks.

Meanwhile, a separate report from the Labor Department showed first-time claims for U.S. unemployment benefits rebounded by slightly more than expected in the week ended September 11th.

The report said initial jobless claims climbed to 332,000, an increase of 20,000 from the previous week’s revised level of 312,000.

Economists had expected initial jobless claims to rise to 328,000 from the 310,000 originally reported for the previous week.

The modest increase came after initial jobless claims fell to their lowest level since March of 2020 in the previous week.

Sector News

Gold stocks turned in some of the market’s worst performances on the day, resulting in a 4.1 percent nosedive by the NYSE Arca Gold Bugs Index. The index ended the session at its lowest closing level in well over a year.

The sell-off by gold stocks came amid a steep drop by the price of the precious metal, with gold for December delivery plunging $38.10 to $1,756.70 an ounce.

Substantial weakness was also visible among steel stocks, as reflected by the 2.9 percent slump by the NYSE Arca Steel Index.

Energy stocks also saw notable weakness on the day as the price of crude oil closed flat following Wednesday’s spike, while strength among airline stocks resulted in a 1.5 percent advance by the NYSE Arca Airline Index.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index slid by 0.6 percent, while China’s Shanghai Composite Index tumbled by 1.3 percent.

Meanwhile, the major European markets moved to the upside on the day. While the French CAC 40 Index climbed by 0.6 percent, the German DAX Index and the U.K.’s FTSE 100 Index both edged up by 0.2 percent.

In the bond market, treasuries extended the pullback seen in the previous session following the retail sales data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.7 basis points to 1.331 percent.

Looking Ahead

Trading on Friday may be impacted by reaction to the University of Michigan’s preliminary report on consumer sentiment in the month of September.

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