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U.S. stocks ended lower on Thanksgiving Eve, with tech stocks leading the decline, as a jump in October inflation raised concerns that the Federal Reserve could take a cautious approach to future rate cuts. All three major indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) slid 0.3% or 138.25 points, to close at 44,722.06 points. The blue-chip index recorded its first loss in six sessions.
The S&P 500 declined 0.4% or 22.89 points, to end at 5,998.74 points. Tech and consumer discretionary stocks were the worst performers.
The Consumer Discretionary Select Sector SPDR (XLY) lost 0.5%, while the Technology Select Sector SPDR (XLK) declined 1.4%. Six of the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq shed 0.6% or 115.10 points to finish at 19,060.48 points.
The fear-gauge CBOE Volatility Index (VIX) was down 1.42% to 13.90. Advancers outnumbered decliners on the NYSE by a 1.64-to-1 ratio. A total of 11.40 billion shares were traded on Wednesday, lower than the last 20-session average of 14.92 billion.
Stocks Pull Back After Inflation Data
Wednesday’s light trading ahead of the Thanksgiving holiday, saw investors capitalizing on gains from major technology stocks that have generally done well this year, sending Nasdaq down. The moves came after fresh data showed inflation rose in October.
Personal consumption inflation (PCE), the Federal Reserve’s preferred inflation gauge, climbed 0.2% sequentially in October and 2.3% from year-ago levels. Core PCE, which excludes the volatile food and energy prices, rose 0.3% month over month and 2.8% year over year.
Although both PCE and core PCE inflation came in line with the consensus estimates, concerns grew that the Federal Reserve could slow its pace of rate cuts in the future. Inflation is still higher than the Federal Reserve’s 2% target and the central bank has hinted earlier that though it will cut interest rates, it will be gradual.
Trading volume will remain low this holiday-shortened week, with markets set to close early on Friday.
On Wednesday, trading volume was almost one-fifth compared to other days. Despite that, it has been an impressive week so far, with the Dow and S&P 500 hitting all-time closing highs earlier this week. All three indexes are on track to close November in the green, with not much activity expected on the last trading day of the month.
Economic Data
A batch of economic data was released on Wednesday. The Commerce Department said that the U.S. economy grew at a 2.8% annual pace in the third quarter, unchanged from its initial estimate. However, it was slower than the second-quarter GDP growth of 3%.
Consumer spending, which accounts for nearly 70% of US economic activity, jumped 3.5% year over year in the third quarter, up from 2.8% in the second quarter. Month over month, consumer spending increased 0.4% in October, surpassing expectations of a rise of 0.3%.
Personal income rose 0.6% month over month in October. Disposable personal income rose 0.4% sequentially in October. The personal saving rate rose to 4.4% last month, up from 4.1% in September.
In a separate report, the Census Bureau said that durable goods orders rose 0.2% in October, missing analysts’ expectations of a rise of 0.5%.
Another report from the Labor Department showed jobless claims totaled 213,000 for the week ending Nov 23, decreasing 2,000 from the previous week’s revised level of 215,000. The four-week moving average was 217,000, a decrease of 1,250 from the previous week’s revised average of 218,250.
Continuing claims came in at 1,907,000, an increase of 9,000 from the previous week’s revised level of 1,898,000. The 4-week moving average was 1,890,250 an increase of 8,500 from the previous week's revised average of 1,876,750.
The National Association of Realtors said that pending home sales rose 2% in October, surpassing economists’ expectations of a decline of 2.1%.
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Stock Market News for Nov 29, 2024
U.S. stocks ended lower on Thanksgiving Eve, with tech stocks leading the decline, as a jump in October inflation raised concerns that the Federal Reserve could take a cautious approach to future rate cuts. All three major indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) slid 0.3% or 138.25 points, to close at 44,722.06 points. The blue-chip index recorded its first loss in six sessions.
The S&P 500 declined 0.4% or 22.89 points, to end at 5,998.74 points. Tech and consumer discretionary stocks were the worst performers.
The Consumer Discretionary Select Sector SPDR (XLY) lost 0.5%, while the Technology Select Sector SPDR (XLK) declined 1.4%. Six of the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq shed 0.6% or 115.10 points to finish at 19,060.48 points.
The fear-gauge CBOE Volatility Index (VIX) was down 1.42% to 13.90. Advancers outnumbered decliners on the NYSE by a 1.64-to-1 ratio. A total of 11.40 billion shares were traded on Wednesday, lower than the last 20-session average of 14.92 billion.
Stocks Pull Back After Inflation Data
Wednesday’s light trading ahead of the Thanksgiving holiday, saw investors capitalizing on gains from major technology stocks that have generally done well this year, sending Nasdaq down. The moves came after fresh data showed inflation rose in October.
Personal consumption inflation (PCE), the Federal Reserve’s preferred inflation gauge, climbed 0.2% sequentially in October and 2.3% from year-ago levels. Core PCE, which excludes the volatile food and energy prices, rose 0.3% month over month and 2.8% year over year.
Although both PCE and core PCE inflation came in line with the consensus estimates, concerns grew that the Federal Reserve could slow its pace of rate cuts in the future. Inflation is still higher than the Federal Reserve’s 2% target and the central bank has hinted earlier that though it will cut interest rates, it will be gradual.
Tech and discretionary stocks suffered following the release of the inflation report. Shares of NVIDIA Corporation ((NVDA - Free Report) ) fell 1.2%, while other tech giants like Meta Platforms, Inc. ((META - Free Report) ) and Salesforce, Inc. ((CRM - Free Report) ) fell 0.8% and 3.5%. NVIDIA carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Trading volume will remain low this holiday-shortened week, with markets set to close early on Friday.
On Wednesday, trading volume was almost one-fifth compared to other days. Despite that, it has been an impressive week so far, with the Dow and S&P 500 hitting all-time closing highs earlier this week. All three indexes are on track to close November in the green, with not much activity expected on the last trading day of the month.
Economic Data
A batch of economic data was released on Wednesday. The Commerce Department said that the U.S. economy grew at a 2.8% annual pace in the third quarter, unchanged from its initial estimate. However, it was slower than the second-quarter GDP growth of 3%.
Consumer spending, which accounts for nearly 70% of US economic activity, jumped 3.5% year over year in the third quarter, up from 2.8% in the second quarter. Month over month, consumer spending increased 0.4% in October, surpassing expectations of a rise of 0.3%.
Personal income rose 0.6% month over month in October. Disposable personal income rose 0.4% sequentially in October. The personal saving rate rose to 4.4% last month, up from 4.1% in September.
In a separate report, the Census Bureau said that durable goods orders rose 0.2% in October, missing analysts’ expectations of a rise of 0.5%.
Another report from the Labor Department showed jobless claims totaled 213,000 for the week ending Nov 23, decreasing 2,000 from the previous week’s revised level of 215,000. The four-week moving average was 217,000, a decrease of 1,250 from the previous week’s revised average of 218,250.
Continuing claims came in at 1,907,000, an increase of 9,000 from the previous week’s revised level of 1,898,000. The 4-week moving average was 1,890,250 an increase of 8,500 from the previous week's revised average of 1,876,750.
The National Association of Realtors said that pending home sales rose 2% in October, surpassing economists’ expectations of a decline of 2.1%.