Thursday 11.12.15 12:04pm
U.S. stocks traded lower Thursday as oil weighed while investors kept an eye on employment data points as well as several speeches from Federal Reserve officials.
U.S. oil futures fell over 2.5 percent, pushing the Dow Jones industrial average down 186.87 points at its lows. The blue chips index is also on track for its worst week in ten and fell below its 200 day moving average.
Goldman Sachs contributed the most losses to the index.
The S&P 500 was also lower for the sixth time in seven sessions as energy fell over 2 percent.
“The correlation between the S&P and oil continues to be very tight,” said Art Hogan, chief market strategist at Wunderlich Securities.
“We sort of came into this morning with a mild upside bias but what’s dragging us down is energy but it’s also rethinking reset on the consumer after Macy’s,” he said.
Macy’s posted it’s worst trading day since 2008 on Wednesday, after reporting mixed quarterly results.
“This clearly tells you there’s a problem with the consumer,” said Adam Sarhan, CEO of Sarhan Capital.
The three major indexes briefly pared losses in late-morning trade, as the Nasdaq Composite tried for gains.
On the data front, weekly jobless claims came in at 276,000, unchanged week over week, but higher than the expected 270,000.
“Jobless claims have been very solid,” said Randy Frederick, managing director of trading and derivatives at Charles Schwab. “Jobless claims and nonfarm payrolls can’t diverge too far and at some point the claims have to spill over int the jobs report.”
The September JOLTS report showed job openings were at 5.5 million, the Bureau of Labor Statistics said.
Thursday’s session also featured several Fed speakers, including Fed Chair Janet Yellen, who delivered welcoming remarks at a conference in Washington, D.C., as investors continued to look for clues about the central bank’s timing on hiking interest rates.
St. Louis Fed President James Bullard — a non-voting member — also spoke on the economy, saying the Federal Open Market Committee’s unemployment and inflation goals have been met.
“I think the Fed speak has been very well choreographed to get everyone on board for a December rate hike,”Hogan said.
Read More Fed’s Bullard: It’s time to raise rates
Richmond Fed President Jeffrey Lacker said in another speech that caution should apply to the notion that policy should respond to signals of incipient financial instability.
Chicago Fed President Charles Evans said the Fed is close to to reaching its employment mandate, but added he is less confident about reaching the inflation goal within a reasonable time frame.
Still on tap: New York Fed President Bill Dudley and Fed Vice-Chairman Stanley Fischer — both voting members.
The chances of a Fed rate hike rose sharply after last Friday’s jobs report came in better than expected. However, Sarhan said the recent problems within the retail and consumer discretionary space “indicate Main Street is not ready for a rate hike.”
“I think it’s uncertainty over the Fed that’s driving the market at this stage of the game,” he said.
Investors also digested remarks made by European Central Bank President Mario Draghi, in which he kept the door open for more economic stimulus.
“The level of QE the ECB has undertaken has helped but it hasn’t been enough,” said Nick Raich, CEO of the Earnings Scout.
Draghi’s remarks briefly pushed the euro back below $1.07 and was down 0.1 percent at $1.075.
European equities traded sharply lower Thursday, with the pan-European Stoxx 600 index dropping over 1 percent.
Asian stocks closed mixed, with the Shanghai composite falling about 0.45 percent and the Nikkei 225 gaining just 0.03 percent. Hong Kong’s Hang Seng index was the outperformer, rising 2.4 percent.
In corporate news, Kohl’s reported earnings of 75 cents per share for the third quarter, 6 cents above estimates. Revenue also exceeded consensus, and Kohl’s also reported a 1 percent increase in same-store sales, above forecasts of a 0.6 percent rise.
Liberty Media said it will recapitalize its common stock into three separate tracking stocks, known as Liberty Braves, Liberty Media, and Liberty Sirius.
Viacom matched estimates with adjusted quarterly profit of $1.54 per share, with revenue slightly below consensus.
The S&P 500 traded down 14 points, or 0.69 percent, at 2,060, with energy leading all sectors lower.
The Nasdaq Composite was down 20 points, or 0.41 percent, at 5,045.
Benchmark 10-year Treasury yields traded near the flatline at about 2.31 percent.
Decliners led advancers 4 to 1 on the New York Stock Exchange, with an exchange volume of 304 million and a composite volume of 1.4 billion at 11:33 a.m. ET.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 17.
WTI futures fell $1.12 to $41.81 a barrel. Gold futures fell $5.60 to $1,079.30 an ounce.
On tap this week:
Earnings: Cisco Systems, Petrobras, Applied Materials, Nordstrom, Blue Buffalo, El Pollo Loco, Party City, Planet Fitness, Sunrun
11:45 a.m.: New York Fed President Bill Dudley
2 p.m.: Federal Budget
6 p.m.: Federal Reserve Vice Chairman Stanley Fischer
Earnings: Tyco, Berry Plastics, J.C. Penney, WGL Holdings
8:30 a.m.: Retail Sales; Retail Sales ex-autos; PPI; PPI ex-food & energy
10 a.m.: Consumer Sentiment; Business Inventories
12:30 p.m.: Cleveland Fed President Loretta Mester
*Planner subject to change.